Economic growth forecast to rise 2.8%

ISLAMABAD (INP): In Pakistan, growth is forecast to rise at 1.9% in FY2024 (ending on 30 June 2024) and 2.8% in FY2025, up from the 0.2% contraction last fiscal year.

Gwadar Pro stated on Sunday quoting Asian Development Bank (ADB) economic forecasts report for Asia April 2024.

According to the report, the shift back to positive growth will come from a recovery in both agriculture and industry.

However, domestic demand will remain constrained by the surge in living costs and tight macroeconomic policies.

Growth is projected to remain subdued in FY2024 and pick up in FY2025, provided economic reforms take effect.

Real GDP is projected to grow by 1.9% in FY2024 driven by a rebound in private sector investment linked to progress on reform measures and transition to a new and more stable government.

An expansion in private consumption and a rise in workers’ remittances from a move toward a market-determined exchange rate should buttress growth.

However, low confidence, to support recovery in industrial output in the latter half of the year.

Construction will remain weak due to elevated construction costs, higher tax rates on property transfers implemented in the FY2024 budget, and rationalization of public investment to consolidate the fiscal position.

Growth in services is projected to strengthen in FY2024 as recovery in agriculture and industry benefit services.

If reforms are implemented, growth is forecast to restart gradually this fiscal year and improve slightly next year.

Inflation is projected to moderate somewhat this year, and more next year, under stabilization policies.

Improving women’s financial inclusion is critical to strengthen growth.