Pakistan Economic Outlook

May 26, 2020

Forward-looking estimates for FY 2020 (July 2019 to June 2020) showed the economy slowed significantly, as the coronavirus outbreak weigh heavily on activity. Economic growth is set to fall to a multi-decade low as private consumption shrinks considerably amid widespread containment measures from March onwards. Recent data corroborates the overall estimate, with exports halving in April amid slackening demand for Pakistani products, while markedly lower imports point to reduced domestic demand. However, remittances held up well in the same month, despite difficulties in major economies around the world. In other news, Moody’s placed its B3 rating under review for downgrade due to growing concerns about the serviceability of Pakistan’s private-sector debt obligations amid severe economic and financial shocks.

Pakistan Economic Growth

Growth is set to return in FY 2021, as domestic demand expands following the pandemic-influenced downturn in FY 2020. However, uncertainty regarding the full extent of the pandemic poses significant downside risks to the outlook, with the impact on the external sector and debt levels particular areas of concern. Our panelists see growth of 2.4% in FY 2021, which is down 0.5 percentage points from last month’s estimate, and 4.1% in FY 2022.

Pakistan Economy Data

	2015	2016	2017	2018	2019
Population (million)	190	194	197	201	205
GDP per capita (USD)	1,426	1,440	1,545	1,566	-
GDP (USD bn)	271	279	305	315	-
Economic Growth (GDP, annual variation in %)	4.1	4.6	5.2	5.5	-
Consumption (annual variation in %)	2.9	7.6	8.5	6.8	-
Investment (annual variation in %)	15.8	7.5	10.3	7.1	-
Industrial Production (annual variation in %)	5.2	5.7	4.6	4.9	-
Unemployment Rate	5.9	6.0	6.0	5.7	-
Fiscal Balance (% of GDP)	-5.3	-4.6	-5.8	-6.6	-
Public Debt (% of GDP)	61.8	65.5	65.1	69.9	-
Money (annual variation in %)	12.8	14.5	13.9	9.5	10.8
Inflation Rate (CPI, annual variation in %, eop)	3.2	3.7	5.4	5.4	12.7
Inflation Rate (CPI, annual variation in %)	2.5	3.8	4.3	5.3	9.4
Policy Interest Rate (%)	6.50	5.75	5.75	6.50	12.25
Exchange Rate (vs USD)	104.9	104.4	110.7	139.8	155.0
Exchange Rate (vs USD, aop)	102.8	104.7	105.3	121.7	150.4
Current Account (% of GDP)	-1.0	-1.7	-4.1	-6.3	-
Current Account Balance (USD bn)	-2.8	-4.9	-12.6	-19.9	-13.8
Trade Balance (USD billion)	-17.3	-19.3	-26.7	-31.8	-28.5
Exports (USD billion)	24.1	22.0	22.0	24.8	24.3
Imports (USD billion)	41.4	41.3	48.7	56.6	52.8
Exports (annual variation in %)	-3.9	-8.8	0.2	12.6	-2.1
Imports (annual variation in %)	-0.8	-0.2	18.0	16.2	-6.8
International Reserves (USD)	16.0	20.9	18.7	12.4	10.2
External Debt (% of GDP)	24.1	26.5	27.4	30.3	-

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Pakistan Facts

	Value	Change	Date
Bond Yield	11.00	0.0 %	Jan 01
Exchange Rate	154.9	-0.05 %	Jan 01

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