Pakistan’s economy to grow at 5.2 percent in 2017 in continuing upsurge

Gwadar Deepsea Port, Photo by Umargondal via Wikimedia Commons

Continuing its upward growth trajectory, Pakistan’s GDP growth is expected to rise to 5.2 percent in the current financial year ending June 30, 2017.

According to the latest World Bank report, Pakistan’s economy will continue the uptick to register GDP growth of 5.5 percent and 5.8 percent receptively in the next two fiscal years. The current year marks third consecutive year of GDP growth expansion.

Released Tuesday, the World Bank report says the upsurge in Pakistani economy has been spurred by a “combination of low commodity prices, rising infrastructure spending, and reforms that lifted domestic demand and improved the business climate.”

The successful conclusion of Special Drawing Rights (SDR) 4.393 billion IMF Extended Fund Facility (EFF) program, aimed at supporting reforms and reducing fiscal and external sector vulnerabilities, lifted consumer and investor confidence, the Bank said.

The report comes as Pakistan looks to boost its economy with development of infrastructure under $ 52 billion China Pakistan Economic Corridor, which opens new trade and energy routes and connectivity between and among surrounding regions including China, the Gulf, Central Asia and South Asia.

Among other positive trends, the World Bank notes that on October 5th, 2016, Pakistan tapped the international market and issued a $1 billion five year dollar-denominated Sukuk (Islamic) bond.

The interest rate paid on the bond was lower compared to what the country paid two years ago for raising a similar amount using the same instrument.

“These positive factors more than offset weak industrial activity, the adverse impact of unfavorable weather on agriculture output, and terrorist attacks in urban areas. “