Publication: Pakistan Development Update, April 2016: From Stability to Prosperity
Date
2016-04
ISSN
Published
2016-04
Author(s)
World Bank Group
Abstract
South Asia emerged as the fastest
growing region in the world in 2015, posting GDP growth of 7
percent. Weak oil and commodity prices, slowing capital
flows and shrinking global trade contributed towards a
deceleration of growth in most of the world's
economies. South Asia - as a net importer of oil - was an
anomaly, growing significantly on the back of higher private
consumption and public investment. Higher remittances and
reserve buffers throughout the region offset the fall in
exports caused by the drop in global demand. The region is
set to maintain real GDP growth above 7 percent over the
next few years. However, the tailwinds are now fading -
capital flows have declined and remittances are starting to
feel the reality of low oil prices. Pakistan, while not
growing as quickly as its neighbors, has continued its
steady growth recovery in H1FY16. Strong growth in
consumption, rising foreign exchange reserves, fast-growing
workers' remittances and a lower import bill
compensated for a significant fall in exports. Low oil
prices generated a significant boost, driving a 9.1 percent
fall in the import bill and reducing inflation
significantly, in turn creating scope to reduce the policy
rate. Private sector consumption, propelled by higher
remittances and a loosened monetary policy, is expected to
account for over half of FY16 GDP growth.
Citation
“World Bank Group. 2016. Pakistan Development Update, April 2016; Pakistan Development Update, April 2016 : From Stability to Prosperity. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/24398 License: CC BY 3.0 IGO.”