Fifth-lowest growth rate in South Asia as inflation continues to rise in Pakistan: Asian Development Bank

The Asian Development Bank (ADB) on Wednesday projected that inflation in Pakistan would remain the highest in the region at 7.5 per cent, and the economy would grow by 4 per cent – the fifth-lowest growth rate among seven South Asian nations, contradicting the government’s claim of lowest prices in the country, reported Shahbaz Rana for The Express Tribune.

Pakistan’s “economy is expected to continue recovering in the fiscal year 2021-22, with real GDP projected to rise by 4 per cent”, according to the ADB report.

It was the fifth-lowest economic growth rate in the region as the economic growth rate in the Maldives (15 per cent) and India (7.5 per cent) remain the highest in the region. Bangladesh is projected to grow at 6.8 per cent and Nepal at 4.1 per cent in 2022, according to the ADB.

The ADB said that the 4 per cent growth rate was contingent on the resumption of structural reforms later in the year in an ongoing programme under the International Monetary Fund (IMF) Extended Fund Facility.

“The economic outlook is clouded, however, by high uncertainty because it is closely tied to the course of the pandemic in Pakistan and globally.”

The ADB has also cautioned about a further increase in prices in Pakistan, provided the Pakistan-IMF deal collapses.

“Risk of inflation higher than forecast derives from any unusual increase in oil prices or from potential currency depreciation in the wake of any early winding down of the ongoing IMF programme,” said the ADB.