UN survey forecasts modest growth for Pakistan’s GDP amid inflation projections

Pakistan is projected to experience a real GDP growth rate of 2 per cent in 2024, with a slight increase to 2.3 per cent expected in 2025, according to a United Nations economic survey.

The survey, titled ‘Economic and Social Survey of Asia and the Pacific 2024: Boosting Affordable and Longer-term Financing for Governments,’ released on Thursday, also forecasts a decrease in the inflation rate from 26 per cent to 12.2 per cent in the same period.

The report highlights the challenges faced by Pakistan’s economy in 2023, citing political unrest and a significant flood that disrupted agricultural production.

To address fiscal pressures, Pakistan, along with Sri Lanka, sought external assistance from the International Monetary Fund (IMF), with additional support from bilateral partners such as China, Saudi Arabia, and the United Arab Emirates.

Both countries are implementing fiscal adjustments, including debt restructuring in Sri Lanka and subsidy removal in Pakistan’s power sector.

Despite moderate tax gaps in Bangladesh, Pakistan, and Sri Lanka, the report suggests that improving tax policies and administration alone may not suffice to bridge development financing gaps, emphasising the need for broader improvements in socioeconomic development and public governance.

The macroeconomic conditions in the developing Asia-Pacific region remain challenging, with a disparity in economic growth among different economies.

While some larger economies experienced a rebound in economic growth, others saw only moderate growth in 2023. Pakistan’s GDP growth rate for the second quarter of fiscal year 2023–24 stood at a modest 1 per cent, below earlier projections ranging from 2–3 per cent.