This year, economic growth in Pakistan reached its highest rate in eight years. With 4.7 percent growth in FY 2016, up from four percent the previous year, the country shows promise for further economic success and prosperity.
The World Bank praised the government’s prudent efforts in restoring economic stability. Growth has largely been driven by consumption, and indicators of economic improvement include low inflation, a low budget deficit and a low current account deficit. Additionally, foreign exchange reserves strengthened. The country’s recently upgraded ratings by Standard and Poor is proof of economic success.
In addition to economic growth, Pakistan has succeeded in reducing the percent of people living in poverty. The percentage of people living in poverty in Pakistan decreased from 64.3 percent in 2002 to 29.5 percent in 2014. The World Bank president claims the country is on track to increased economic growth and prosperity, but in order to maintain and expand growth, the government must take additional steps.
Low rates of investment and declining export competitiveness hinder further growth. In order to strengthen economic growth in Pakistan, public, private and international investments will need to increase.
Despite Pakistan’s success in poverty reduction and improving health, nutrition and education have been trailing behind. The World Bank’s Country Director in Pakistan recommends implementing structural reforms that will benefit the entire population to promote viable and widespread success.
Pakistan will benefit from investments in electricity, education, health and nutrition. The government can help achieve these goals by expanding the electricity supply, accelerating energy reforms, ensuring anti-poverty measures and encouraging private sector investments. By expanding services and prioritizing individual prosperity, economic growth in Pakistan will benefit the population at-large.
Pakistan’s Prime Minister has expressed dedication to widespread growth by investing in the development of mega-hydropower projects, rail and road infrastructure, education and health.
Economic growth in Pakistan is attracting international interest, and providing opportunities for investment. The high performance of the Pakistan Stock Exchange and projects under the China-Pakistan Economic Corridor are leading the World Bank, the China Development Bank and other sovereign investment authorities to express interest in investing in Pakistan.
Although improvements are needed, economic growth in Pakistan is expected to continue. The World Bank projects further success for Pakistan, achieving a 4.8 percent growth rate in FY 2017 and 5.4 percent in FY 2018. Services in Pakistan are expected to grow by five percent. Large-scale manufacturing is expected to grow between four and 4.5 percent and investments are expected to increase from 14 to 14.6 percent of the GDP.
Economic growth in Pakistan is promising for the country’s future. Success in reducing poverty, stimulating economic growth and attracting international investments prove the country is committed to accelerating sustainable economic growth for years to come.
– McKenna Lux