Asian Development Bank: Pakistan’s economy to rebound this year

The Asian Development Bank said economic growth in the world is predicted to recover this year, until it rates in 2022, as the coronavirus pandemic is steadily resuming.

In 2021 Pakistan's economy will expand by 2 percent according to the Business Recorder's Asian Development Outlook (ADO) 2021 forecast, with COVID-19 limitations easing. With COVID-19 effective vaccine deployment and the implementation of economic stable policies, growth is projected to accelerate to 4% in 2022, with increased demand and trust of investors.

"Through the accelerated application of vaccinations and further reforms to promote economic recovery, including social security and funding of the private sector it is essential that Pakistan continue to fight the pandemic," said F. Cleo Kawasaki, Pakistan's Acting Country Director at ADB.

"Enhanced financial access for SMEs is necessary if new business markets are to be unlocked and new jobs are to be promoted. The foundations of the ADB Country Partnership Strategy 2021-2025, which supports an equitable and sustainable recovery, also include continued macroeconomic stability and increasing competitiveness," he added.

The study shows that the industry is prepared for rapid production and construction development in FY2021. As shopping and trading pick-up services are expected to bounce back. Agriculture is predicted to be growing slower mainly because of a significantly lower crop of cotton, after heavy rainfall, insect attacks, and continued contractions in cultivated land areas.

The report indicated that inflation is forecast to fall to 8.7 p.p. in FY2021, partially because the grain market, wheat and sugar subsidies, and closer control of basic resources are expected to increase.

In the meantime, investment is predicted to strengthen as the global feeling increases and the International Monetary Fund-sponsored stimulus policy continues.

The study acknowledged the need for robust funding for SMEs in order to boost productivity and ensure employment for young people joining the labor market. The report notes that In order to promote the migration of informal SMEs to the formal market, licensing and registration procedures should be streamlined. Their access to finance providers and export markets may also grow through digitalization.