April 04, 2023 (MLN): Pakistan’s gross domestic product (GDP) growth is projected to slow to 0.6% in FY23 from 6% last fiscal year as the economy struggles to recover, according to the Asian Development Outlook (ADO) in April 2023.
"Growth is forecast to rise to 2% in FY2024, assuming the resumption of macroeconomic stability, implementation of reforms, post-flood recovery, and improving external conditions," the report further read.
Pakistan’s economic growth is expected to slow significantly in FY23 in the wake of last year’s devastating floods, ballooning inflation, a current account deficit, and an ongoing foreign exchange crisis, it noted.
Pakistan’s economy continues to face strong headwinds while last year’s catastrophic floods have exacerbated the economic and financial challenges,” said ADB Country Director for Pakistan Yong Ye. “Yet, with a history of resilience in the face of adversity and depending on a fast return to stability twinned with robust macroeconomic and structural reforms, Pakistan can bounce back. ADB is committed to continuing to support Pakistan’s economic recovery and development plans.”
ADO April 2023 noted that climate change poses a grave challenge to Pakistan's economic, social, and environmental development. According to the Global Climate Risk Index, the country has ranked among the 10 most vulnerable nations worldwide in the past 2 decades.
Climate-induced extreme weather has led to thousands of fatalities and colossal losses in agriculture, infrastructure, and the economy.
In FY23, industrial growth is forecast to continue decelerating, which reflects fiscal and monetary tightening, a significant depreciation of the local currency, and higher domestic oil and electricity prices.
