Pakistan Economic Forecast

Pakistan Economic Outlook

December 13, 2019

The economy likely remained weak in the first quarter of FY 2020, which ran from July to September. Large-scale manufacturing contracted at a sharper rate in Q1 than in the previous quarter, while higher electricity tariffs also likely depressed household spending. Turning to the second quarter, the current account balance posted a surplus in October for the first time in roughly four years, partly thanks to stronger exports, boding well for the external sector. That said, a dip in consumer confidence and elevated inflation will likely constrain consumer spending. In other news, on 2 December, Moody’s upgraded Pakistan’s credit rating outlook from negative to stable, and affirmed its B3 rating, due to an upbeat assessment of the current account and solid progress on fiscal reforms. Moreover, on 6 December, the Asian Development Bank approved a USD 1.3 billion loan to support the domestic economy.

Pakistan Economic Growth

Growth is projected to decelerate in FY 2020, dragged by slowing private consumption due to higher taxes and tight monetary conditions. In addition, weak public finances and tensions with India pose downside risks to the outlook. That said, ongoing reforms should support business confidence and fixed investment. Our panelists see growth of 2.8% in FY 2020, which is down 0.1 percentage points from last month’s estimate, and 4.0% in FY 2021.

Pakistan Economy Data

2014 2015 2016 2017 2018
Population (million)183186190194197
GDP per capita (USD)1,2671,3141,4261,4401,545
GDP (USD bn)231245271279305
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)2.62.515.87.510.3
Industrial Production (annual variation in %)
Unemployment Rate6.
Fiscal Balance (% of GDP)-8.0-5.5-5.3-4.6-5.8
Public Debt (% of GDP)62.662.761.865.565.1
Money (annual variation in %)16.912.612.814.513.9
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)9.0010.006.505.755.75
Exchange Rate (vs USD)105.4100.8104.9104.4110.7
Exchange Rate (vs USD, aop)101.5101.0102.8104.7105.3
Current Account (% of GDP)-1.1-1.3-1.0-1.7-4.1
Current Account Balance (USD bn)-2.5-3.1-2.8-4.9-12.6
Trade Balance (USD billion)-15.4-16.6-17.3-19.3-26.7
Exports (USD billion)24.825.
Imports (USD billion)40.241.741.441.348.7
Exports (annual variation in %)0.31.1-3.9-8.80.1
Imports (annual variation in %)-0.53.8-0.7-0.218.0
International Reserves (USD)8.511.816.020.918.7
External Debt (% of GDP)26.326.724.126.527.4

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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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