Pakistan Economic Forecast

Pakistan Economic Outlook

September 21, 2021

The economy expanded robustly in fiscal year 2021 (July 2020–June 2021), due to stronger domestic demand and a healthy external sector. However, economic momentum has seemingly lost some steam in Q1 FY 2022 (July–September 2021), as a third wave of Covid-19 has likely hampered economic sentiment and weighed on activity—amid some partial lockdowns in place since July. Moreover, worker remittances and export growth averaged markedly lower in July–August relative to the previous quarter, boding poorly for overall GDP. Furthermore, industrial production posted the worst year-on-year result since June 2020 in July, as large-scale manufacturing growth slowed notably. On a positive note, affordable housing loans under the government’s flagship markup subsidy scheme generated a surge in lending activity in July–August, and it should have continued to gain momentum in September.

Pakistan Economic Growth

GDP growth is set to ease in FY 2022 (July 2021–June 2022) following FY 2021’s rebound. Fixed investment and private consumption growth should slow as ongoing pandemic-related concerns and a moderating global economic recovery weigh on domestic demand. Downside risks stem from new variants of the virus, rising debt and geopolitical tensions. FocusEconomics panelists project growth of 4.0% in FY 2022, which is unchanged from the previous month’s forecast. In FY 2023, our panel forecasts GDP growth of 4.5%.

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
Exchange Rate (vs USD)104.9104.4110.7139.8155.0
Policy Interest Rate (%)6.505.755.756.5012.25
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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