New Delhi, Sep 21 (IANS) Pakistan’s economy stands out as an outlier in Asia, according to a new report that predicts the country will have the highest inflation rate but the fourth lowest economic growth rate among all 46 economies in the region, a media report said.
The Asia Development Outlook, the flagship publication of the Asian Development Bank (ADB), has slightly revised downward the economic growth forecast to 1.9 per cent, but it has significantly increased the inflation projection to 25 per cent for the current fiscal year, The Express Tribune reported.
The report anticipates further increases in interest rates and calls for a fiscal consolidation plan that includes limited spending on defence and energy subsidies.
The report also points out that while the currencies of developing economies in Asia have marginally depreciated, Pakistan’s currency has seen a steep devaluation of 30%. Unlike other regional economies, Pakistan saw a decline in foreign remittances, The Express Tribune reported.
The ADB notes that there are exceptionally high downside risks to Pakistan’s economic outlook.
Previously, Pakistan’s economic outlook was relatively poor only within the South Asia region, but continued deterioration in economic conditions has placed the country near the bottom of Asia, The Express Tribune reported.
The report projects that “for FY2024, inflation is forecast at 25 per cent, sharply higher than the earlier 15 per cent projection".
This inflation rate is far higher than the target range set by the central bank and much higher than the target. It represents the highest inflation rate in Asia, significantly exceeding the projected 10 per cent for any other economy”.
The report emphasises that regional currencies have depreciated only marginally so far this year, by 3.7 per cent on a GDP-weighted average basis against the US dollar. However, Pakistan’s currency experienced a significant 30 per cent devaluation since January, The Express Tribune reported.