The Asian Development Bank (ADB) has warned that the political demonstrations, floods as well as security challenges for Pakistan pose downside risks to the economic growth forecast for the fiscal year 2015.
In its ‘Update’ to the ‘Asian Development Outlook 2014’ published yesterday, ADB revised the economic growth projection for 2015 to 4.2 per cent, and states projections for 2015 assume that the government will make satisfactory progress on its economic agenda to reform the energy sector and state-owned enterprises, rationalise import tariffs, and improve the business climate.
Revising the growth projection, the ADB report however, said even concentrated reform would need several years to eliminate electricity and gas shortfalls and to effect the change needed to lift structural constraints on growth.
GDP growth projected at 4.2pc reflects some easing of fiscal consolidation and increased allocations for public sector development spending. Continuing reform and an improving security environment would further boost business confidence and foster private investment. The prospect of strong growth in manufacturing depends on further progress in easing energy shortages.
The consolidated budget for 2015 targets further trimming the deficit to 4.9pc of GDP from 5.5pc estimated for last fiscal year through reduced expenditure.
