The World Bank (WB) has projected 4 per cent growth in Pakistan’s Real Gross Domestic Product (GDP) during the fiscal year 2013-14 as the economy has started to show signs of improvement.
The Bank in its recent report “South Asia Economic Focus Spring 2014, Time to Refocus”, launched on Wednesday, said that Real GDP is projected to grow at 3.6-4.0 percent in FY14.
The report attributed the growth to dynamic manufacturing and service sectors, better energy availability and early revival of investors’ confidence.
The regional real GDP growth in South Asia is expected to gradually increase from 4.8 percent in 2013 to 5.2 percent in 2014 and the main pillers of this growth projection are solid pic-up in gross fixed investment as well as continued soild exports growth, it added.
The report revealed that in Pakistan inflation year on year base remains at 7.9 per cent where as the fiscal deficit continued at around 6 per cent of GDP due to improved in tax collection and reduced expenditures.
The current account deficit remains modest, at around 1 per cent of GDP, supported by strong remittances and export dynamism, and the external position is slowly improving since monetary and exchange rate policies switched gear toward rebuilding reserves past November.
It revealed that performance under the IMF program remains satisfactory, with the 2nd Review concluded on March 24. Domestic and external risks remain high, however, but are declining.
Thus far, the impulse to growth stems mainly from industry and services, while agriculture is estimated to slightly miss its annual target.
An improved industrial sector performance can be attributed to better energy availability and post-election investor confidence. Even with this uptick in local industry, better performance by the telecom sector, and improved volumes of international wholesale and retail trade, the services sector appears to have stolen the limelight debt which might affect the magnitude of fiscal adjustment.
Speaking on the occasion World Bank’s South Asia Economist Martin Rama said that Pakistan’s GDP grew better but still need to accelerate the growth momentum for tackling the future challenges.