Pakistan Economic Forecast

Pakistan Economic Outlook

December 16, 2021

GDP growth likely moderated in Q1 FY 2022 (July–September 2021), as a third wave of Covid-19 cases hampered economic activity amid some partial lockdowns. Turning to Q2 FY 2022, economic growth is likely easing further due to a less supportive base effect, but relatively low reporting of new Covid-19 cases should be reviving economic sentiment. That said, while export growth remained upbeat in October–November, import growth continued to surge over the same period—predominately the result of still-elevated commodity prices. This is translating into surging prices for fuel and food, and bodes poorly for consumption activity. In other news, the IMF concluded its Article IV mission in late November, reaching a staff-level agreement to complete the sixth review under the USD 6 billion Extended Fund Facility, which will likely resume the stalled program and unlock USD 1 billion in funds to Pakistan.

Pakistan Economic Growth

The expansion in economic activity is projected to moderate in FY 2022 (July 2021–June 2022) following FY 2021’s rebound. A slowdown in domestic demand is seen weighing on overall growth, while normalizing foreign demand will likely cap growth in the external sector. Downside risks stem from new variants of the virus, twin deficits and geopolitical tensions. FocusEconomics panelists project growth of 4.2% in FY 2022, which is unchanged from the previous month’s forecast. In FY 2023, our panel forecasts GDP growth of 5.0%.

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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