‘Pakistan Development Update’: World Bank projects economy will grow at 5%, miss govt target
By Salman SiddiquiPublished: November 11, 2016
KARACHI: The Washington-based lender added that the country’s economy could see a growth of 5.4% in FY18 on the back of continued mushroom growth in the services sector, recovery of agriculture and uptick in infrastructure investment.“The services sector, which comprises more than half of the economy, is expected to be the primary source of growth,” stated the World Bank report on ‘Pakistan Development Update – Making growth matter’ that was launched in Karachi on Thursday.The (services) sector is expected to grow by 5.6% in FY17. After a lean performance in FY16, the agriculture sector is expected to recover sufficiently to grow at 2.7% in FY17, while industrial sector is forecast to grow at 5.7%, the report added.The World Bank has projected Pakistan’s economy to grow at 5% in the ongoing fiscal year, which means that the country will miss the government-set target of 5.4%.On the demand side, growth is expected to be primarily driven by public and private consumption, supported somewhat by a moderate increase in investment. “The investment-to-GDP ratio would increase to 14.4% in FY17 and 14.6% in FY18 from 14% in last two years,” said the bank.
The low investment-to-GDP ratio is expected to increase due to infrastructure projects under China-Pakistan Economic Corridor (CPEC) and other public investment. “These projects, if delivered on schedule, are expected to accelerate growth in the domestic construction industry and expand electricity generation. Improved electricity availability would, in turn, support growth in industry and services sectors,” it said.
Speaking at the launch of the report, World Bank Country Director for Pakistan, Patchamuthu Illangovan, stressed the need for increased investment in social sectors like health, education and nutrition. “All this would lead to a vibrant and dynamic society as well as the economy,” he said.
World Bank Lead Country Economist, Enrique Blanco Armas, added that “growth will depend on structural reforms, CPEC implementation and investment in health and education.”