Pakistan’s economic recovery to continue amid steady vaccine rollout: ADB

ISLAMABAD: Pakistan's economic growth has returned 3.9 percent in the FY 2021 financial year ending June 30, 2021 and is expected to reach 4% in FY 2022, as business activity resumes in the second year of coronavirus (Covid-19) epidemics, the Asia Development Bank (ADB) said in a report on Wednesday.

According to the Asia Development Outlook (ADO) 2021 Update, ADB's annual economic publication, the Pakistani economy is expected to continue to thrive in FY 2022, backed by strong private investment, improved business activity, sustainable drug delivery, and measures to boost FY economy 2022. However, significant uncertainty undermines the economic outlook on the epidemic in Pakistan and globally.

"Pakistan's economy is on the verge of recovery, backed by promising growth in industry and the service sector," said Pakistan's ADB country director Yong Ye.
“The continued implementation of the Covid-19 vaccine program, structural changes, and the expansion of social protection systems are all key to ensuring inclusive and sustainable growth. Incentives and monetary policies to increase international competitiveness, strengthen the productivity of the manufacturing sector, and increase private investment will continue to play a significant role in strengthening the economic outlook. ”

Pakistan's economic growth at FY 2021 was underpinned by Covid-19's improved security strategies through the second and third waves of infection and the continuation of monetary and fiscal policies that accelerated recovery in all sectors.
Growth in the industry, especially in the construction and production of small quantities, and services are expected to improve at FY 2022. Agriculture is also expected to continue to support GDP growth.
Inflation fell to 8.9 percent in FY 2021.

 Food inflation remained high due to disruptions in commodity prices, rising wheat and sugarcane prices, and increased rainfall. Rising global oil prices have pushed inflation into energy prices. However, inflation on some commodities has diminished appreciation due to the introduction of the Pakistani tax and the.

 postponement of the planned increase in electricity and domestic fuel prices.

The State Bank of Pakistan has maintained its policy rate of 7% to support economic recovery. Investment is expected to be strong as the global situation improves and the strengthening program funded by the International Monetary Fund continues to move forward.

ADB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and Pacific Pacific, while continuing its efforts to eradicate extreme poverty. Founded in 1966, it is headed by 68 members, 49 of whom are from the region.