Pakistan Economic Forecast

Pakistan Economic Outlook

August 25, 2020

A provisional GDP estimate for FY 2020 (July–June), using data from the first three quarters and adjusted for the Covid-19 fallout, pointed to a slight contraction in output, as lockdown measures weighed heavily on activity in the final quarter. Industrial production fell by over a quarter in Q4 FY 2020, while exports plummeted by nearly a third in the same period. Turning to Q1 FY 2021, economic activity should be gaining some momentum after most nationwide lockdown measures were eased from late May. In July, exports rebounded on the back of growth in shipments of textiles and manufactured food products, while remittances were solid. In other news, Moody’s affirmed its B3 rating with a stable outlook in early August, citing macroprudential policies implemented ahead of the crisis which should contain economic vulnerabilities induced by the pandemic.

Pakistan Economic Growth

The economy should recover in FY 2021 as the pandemic recedes and domestic demand gradually rebounds. However, uncertainty regarding the evolution of the virus domestically and the pace of the revival in external demand for Pakistani products are key risks. Mounting debt and geopolitical tensions further cloud the outlook. FocusEconomics panelists project growth of 1.3% in FY 2021, which is down 0.1 percentage points from last month’s estimate, and 4.1% in FY 2022.

Pakistan Economy Data

2015 2016 2017 2018 2019
Population (million)190194197201205
GDP per capita (USD)1,4261,4401,5451,5661,360
GDP (USD bn)271279305315278
Economic Growth (GDP, annual variation in %)4.75.55.65.81.0
Consumption (annual variation in %)2.97.68.56.23.0
Investment (annual variation in %)15.87.510.311.2-12.8
Industrial Production (annual variation in %)5.25.74.64.6-2.3
Unemployment Rate5.96.06.05.7-  
Fiscal Balance (% of GDP)-5.3-4.6-5.8-6.6-8.9
Public Debt (% of GDP)61.865.565.169.983.7
Money (annual variation in %)12.814.513.99.510.8
Inflation Rate (CPI, annual variation in %, eop)3.23.75.45.412.7
Inflation Rate (CPI, annual variation in %)2.53.84.35.39.4
Policy Interest Rate (%)6.505.755.756.5012.25
Exchange Rate (vs USD)104.9104.4110.7139.8155.0
Exchange Rate (vs USD, aop)102.8104.7105.3121.7150.4
Current Account (% of GDP)-1.0-1.7-4.1-6.3-4.9
Current Account Balance (USD bn)-2.8-4.9-12.6-19.9-13.5
Trade Balance (USD billion)-17.3-19.1-26.0-30.9-27.6
Exports (USD billion)24.122.022.024.824.3
Imports (USD billion)41.441.148.055.751.9
Exports (annual variation in %)-3.9-8.80.212.6-2.1
Imports (annual variation in %)-0.8-0.616.716.0-6.8
International Reserves (USD)16.020.918.712.410.2
External Debt (% of GDP)24.126.527.430.338.2

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Pakistan Facts

Value Change Date
Bond Yield11.000.0 %Jan 01
Exchange Rate154.9-0.05 %Jan 01

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