World Bank Predicts Strong Growth for Pakistan for Next Two Years

The World Bank has recently released its Macroeconomic Outlook, 2015. In the report, the World Bank predicts strong growth for Pakistan for the next two years. That growth includes steady expansion with low inflation supported by an improving external position and strong new fiscal policies.

The World Bank has recently released its Macroeconomic Outlook, 2015. In the report, the World Bank predicts strong growth for Pakistan for the next two years. That growth includes steady expansion with low inflation supported by an improving external position and strong new fiscal policies.

According to the World Bank’s report, Pakistan should experience a projected rate of growth of approximately 4.5% in the 2016 fiscal year. That growth should increase further to 4.8% in the 2017 fiscal year. The report predicts much of that growth will be supported by expansion in the nation’s industry and services sectors.

Per the World Bank, Pakistan’s investment should also increase markedly over the next two years, expanding to 15.4% of Gross Domestic Product (GDP) by the 2017 fiscal year. This increase is attributed to the activation of the China-Pakistan Economic Corridor (CPEC), and its myriad related projects.

Inflation should remain low, according to the report, thanks to the low prices of commodities, the stability of monetary exchange rates, and recently enacted (and pending) prudent fiscal policies.

Despite the overall positive aspects of the World Bank report’s findings, however, it did have a few cautionary tales, as well. For example, it warns that the current national deficit will probably increase slightly too about 1% of the nation’s GDP by the end of fiscal year 2017. While that may seem a relatively low rate to those living in developed nations, for a developing economy like Pakistan’s, that can be a substantial deficit rate. Despite that expansion, the World Bank still believes the spending remains in a range it describes as “manageable.”

Surprisingly, the report noted that remittances from Gulf countries do not appear to have diminished, despite the decline in oil prices. In fact, the World Bank predicts remittances will remain strong for the next two years, contributing substantially to the Pakistani economy. However, Pakistan’s exports will probably contract over the next year because of the same slackening in oil demands.

Another report by the World Bank, named “Pakistan Country Snapshot,” also lauded the nation for making impressive progress in reducing levels of poverty and increasing overall prosperity. Per the report, “The percentage of the population below the national poverty rate has fallen from 34.7% in fiscal year 2002 to an estimated 12.4 percent in FY2011.”