Pakistan Economic Forecast

Pakistan Economic Outlook

January 23, 2018

Improved security conditions, strong credit growth and soaring investment are shoring up economic activity in FY 2018, which ends on 30 June 2018. Moreover, agricultural output is recovering due to a return to more normal monsoon rains. That said, buoying domestic activity is propelling import growth, causing the current account deficit to deteriorate sharply. As a result, international reserves have been declining in recent months and, in November, they hit their lowest level in over two years. Low reserves and the government’s large fiscal deficit represent a serious threat to Pakistan’s financial stability.

Pakistan Economic Growth

This year, the economy will continue to benefit from bold investment, mostly related to the China–Pakistan Economic Corridor. While private consumption will remain robust, it will decelerate as higher inflation is eroding households’ purchasing power. FocusEconomics panelists expect GDP to grow 5.0% in FY 2018, unchanged from last month’s estimate, and 5.1% in FY 2019.

Pakistan Economy Data

20122013201420152016
Population (million)181184186190194
GDP per capita (USD)1,2411,2601,3141,4281,466
GDP (USD bn)224231245271284
Economic Growth (GDP, annual variation in %)3.83.74.14.04.7
Consumption (annual variation in %)5.02.15.63.27.0
Investment (annual variation in %)2.42.62.514.15.7
Industrial Production (annual variation in %)2.60.64.75.25.8
Unemployment Rate6.06.06.05.96.0
Fiscal Balance (% of GDP)-6.8-8.2-5.5-5.3-4.6
Public Debt (% of GDP)64.565.265.164.667.8
Money (annual variation in %)13.416.612.812.814.5
Inflation Rate (CPI, annual variation in %, eop)11.35.98.23.23.2
Inflation Rate (CPI, annual variation in %)11.07.48.64.62.9
Policy Interest Rate (%)12.009.0010.007.006.25
Exchange Rate (vs USD)94.6599.698.68101.9104.7
Exchange Rate (vs USD, aop)89.3796.82102.9101.4104.3
Current Account (% of GDP)-2.1-1.1-1.3-1.0-1.1
Current Account Balance (USD bn)-4.7-2.5-3.1-2.7-3.3
Trade Balance (USD billion)-15.7-15.4-16.6-17.2-18.4
Exports (USD billion)24.724.825.124.122.0
Imports (USD billion)40.440.241.741.340.4
Exports (annual variation in %)-0.50.31.1-3.9-8.8
Imports (annual variation in %)-0.2-0.53.8-0.9-2.3
International Reserves (USD)14.18.511.816.020.9
External Debt (% of GDP)28.125.025.322.724.5

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Pakistan Facts

ValueChangeDate
Bond Yield8.800.0 %Feb 19
Exchange Rate110.8-0.05 %Feb 19

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