ISLAMABAD: Pakistan’s economic growth is projected to accelerate from 4.5 percent in 2016 to 4.8 percent in 2017, supported by growing industry and services and greater investment as well as buoyed by low oil prices and substantial remittances, World Bank report said.
According to the report “South Asia Economic Focus”, sustained and inclusive growth with further acceleration would require tackling pervasive power cuts, a cumbersome business environment, and low access to finance through the successful implementation of tax and energy reforms.
The report said that the South Asian region’s economic performance prospects remained strong due to limited exposure to global turbulence, coupled with increasing investment activity.
“South Asia shows resilience in the face of turbulent international markets and remains the fastest-growing region in the world, with economic growth forecasted to gradually accelerate from 7.1 percent in 2016 to 7.3 percent in 2017”, the report added.
The report’s analysis of fiscal policy across the region suggests that governments need to find a balanced path towards fiscal consolidation.
“Fiscal policy has a wide range of impacts for development. The fiscal deficit affect macroeconomic stability, capital expenditures are needed for growth, and taxes and social spending matter for equity,” said World Bank South Asia Chief Economist Martin Rama in a statement of the Bank received here on Monday.
“With the currently low oil prices, this is also an opportune time for South Asian policy makers to introduce or expand explicit carbon taxes. This would improve environmental and fiscal sustainability at the same time.”
The report projected that in Afghanistan, growth was expected to only marginally increase from 1.9 percent in 2016 to 2.9 percent in 2017.
Similarly Bangladesh will see growth sustained at 6.8 percent in 2017 compared to 6.3 percent in 2016 while economic activity in Bhutan is expected to gain momentum with Gross Domestic Product (GDP) expected to grow at 6.8 percent in 2017 compared to 6.7 percent in 2016.
In Maldives, GDP growth is expected to be modest at to 3.5 percent in 2016, and to 3.9 percent in 2017 whereas in India, GDP growth is expected to be 7.7 percent in 2017 compared to 7.5 percent in 2016, the report said adding that Nepal’s growth prospects to 1.7 percent in 2016 compared to 3.4 percent in 2015.