UN projects over 2% GDP growth rate in Pakistan

In Local
April 06, 2024



ISLAMABAD:

The United Nations has projected accelerated economic growth, and reduction in inflation by more than half in Pakistan, in line with similar predictions made recently by the World Bank and other international financial institutions about the country.

The 2024 Economic and Social Survey of Asia and the Pacific region, released by the UN Economic and Social Commission for Asia and the Pacific (UN-ESCAP) on Thursday, predicted real gross domestic product (GDP) growth of 2% and 2.3% in the current and next fiscal years, respectively.

“In Pakistan, the economy faced political unrest that had adverse impacts on business and consumer sentiment while a massive flood disrupted agricultural production,” the survey said, adding that in the wake of fiscal pressure across the region Pakistan resorted to external assistance.

“In the case of Pakistan, the country secured an IMF [International Monetary Fund] agreement in mid-2023 which would help with further assistance from such bilateral partners as China, Saudi Arabia and the United Arab Emirates,” it noted.

The UN survey said that Pakistan’s economic growth was accelerating in the current fiscal year 2023-24 and the real growth rate would increase by more than 2% in the next fiscal year, while the inflation rate was likely to decrease from the current 26% to 12.2% in the next fiscal.

UN-ESCAP said that despite the low tax levels, tax gaps in Bangladesh, Pakistan and Sri Lanka were moderate and not necessarily small if measured as a share of current tax revenues rather than as a share of GDP.

“This suggests that better tax policies and administration alone may not help bridge the vast development financing gaps in low-tax countries. Overall improvements in socioeconomic development and public governance would be needed as well as tax revenue enhancement on a larger scale.”

Earlier, the World Bank had also made similar assessment of Pakistan’s economy, saying that GDP growth rate would increase and the inflation rate would some down. Besides the World Bank, Bloomberg reports had also confirmed that the “signs of economic stability in Pakistan are significant”.

About the Asia-Pacific region, the UN survey stressed that developing countries needed adequate and long-term resources and that they must choose whether to pay off their previous expensive debts or spending resources on education, health and social improvement of their peoples.

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