Pakistan's Economic Growth In FY 16 Strengthened And Expected To Accelerate In FY 2017 And 2018: WB

ISLAMABAD, Nov 10 (UrduPoint / Pakistan Point News - 14th Nov, 2016 ) : Pakistan's economic growth in Financial year 2016 strengthened and was expected to accelerate in Financial years of 2017 and 2018 but this would be dependent on structural reforms, China Pakistan Economic Corridor (CPEC) implementation, investment in healh, education for a stronger human capital, said a senior official of the World Bank.

"Falling exports and stagnant investment rates remain challenges for the Pakistan's economy", Enrique Blanco Armas Lead Country Economists Macroeconomic and Fiscal Management told a group of Islamabad based journalists at a briefing here this afternoon.

The briefing on Pakistan Development Update was organized by Country office here in the Federal capital. He said that after achieving macroeconomic stability, the government's structural reform programme was progressing but there was much more to do.

The World Bank official further said that although Pakistan has achieved remarkable success in reducing monetary poverty, progress on health, education and nutrition was slow. Mr.Armas was of the view that Pakistan investment rate was well below the South Asian average.

He stressed the need for improving Pakistan's trade competitiveness, trade facilitation ,logistics and infrastructure, in order to boost its exports. He said that growth was expected to be driven by public and private consumption.

He further observed that a moderate increase in investment was also expected ,from 14 percent of GDP in FY 16 to 14.6 percent in FY 18. "On supply side,the services sector was expected to continue to drive growth, the current account deficit was expected to widen but financial flows will continue to support reserve build up", he remarked.

The World Bank official said that in fiscal year (FY) 2016 reached 4.7 percent-the highest rate in eight years and a significant increase from the previous year's 4.0 percent. He noted that South Asia continues to lead global growth, expanding by 6.8 percent in FY16.

He projected that the pace of Pakistan's economic growth would accelerate to 5.4 percent in FY18. He said that a moderate increase in investment (related to CPEC projects) is expected to contribute to an acceleration of growth, which would continue to be driven by public and private consumption.

Like others in South Asia, Pakistan's growth was driven by domestic consumption that continues to compensate for weak global demand. Released twice a year, the Pakistan Development Update includes recent developments across the economy, the near-term outlook as well as special sections with a more detailed discussion of key development challenges for Pakistan, a World Bank statement issued here said.

He said that Pakistan has made significant progress in reducing poverty over the last decade. Based on the revised poverty line adopted in early 2016, the percentage of people living below the poverty line decreased from 64.3 percent in FY02 to 29.5 percent in FY14.

He said that the pace of Pakistan's economic growth would accelerate to 5.4 percent in FY18. A moderate increase in investment (related to CPEC projects) was expected to contribute to an acceleration of growth, which would continue to be driven by public and private consumption.

He said that in the long term, growth will be driven by increased investment in both physical and human capital, with increased focus on better nutrition, health and education outcomes. The World Bank highlighted Pakistan's success in reducing poverty over the last decade and a half - but contrasted this with the lack of progress in health, education and nutrition outcomes since 2010.

"Pakistan has made significant progress in reducing poverty over the last decade. Based on the revised poverty line adopted in early 2016, the percentage of people living below the poverty line decreased from 64.3 percent in FY02 to 29.5 percent in FY14.

This reduction in poverty is corroborated when analyzing other data, such as asset ownership", says Muhammad Waheed, Senior Economist and lead author of the report. "But stunting rates have been unchanged for decades and health and education outcomes have shown little improvement since 2010.

By reinvesting its economic gains in health and education systems, Pakistan can make growth matter for all its citizens." The report projected that the pace of Pakistan's economic growth will accelerate to 5.4 percent in FY18.

A moderate increase in investment (related to CPEC projects) is expected to contribute to an acceleration of growth, which will continue to be driven by public and private consumption.