ISLAMABAD   -  The Asian Development Bank (ADB) has noted that Pakistan’s public debt is forecasted to decline by 7 percent to 70 percent of the GDP in the ongoing financial year.

“In Pakistan, public debt is forecast to decline by 7 percentage points to 70 percent of GDP in 2024–2025. Still, interest payments are expected to require a staggering 62 percent of fiscal revenues, up from 41 percent in 2022–2023,” according to the latest edition of Asian Development Outlook (ADO). It stated that the provisional government estimate of GDP growth in Pakistan for FY 2023-24 (ending 30 June 2024) stood at 2.4 percent, reflecting robust agricultural output due to improved weather conditions and subsidised government credit, among other factors. The ADB noted that Pakistan also cut policy rates as inflation fell to 11.8 percent in May, down from 38 percent in the same period last year. Meanwhile, it has forecasted high inflation in Pakistan for this year. The Asian Development Bank (ADB) has slightly raised its economic growth forecast for developing Asia and the Pacific this year to 5.0 percent from a previous projection of 4.9 percent, as rising regional exports complement resilient domestic demand. The growth outlook for next year is maintained at 4.9 percent. Inflation is forecast to slow to 2.9 percent this year amid easing global food prices and the lingering effects of higher interest rates, according to the latest edition of Asian Development Outlook (ADO), released on Thursday.

After a post-pandemic recovery that was driven mainly by domestic demand, exports are rebounding and helping propel the region’s economic growth. Strong global demand for electronics, particularly semiconductors used for high-technology and artificial intelligence applications, is boosting exports from several Asian economies. “Most of Asia and the Pacific are seeing faster economic growth compared with the second half of last year,” said ADB Chief Economist Albert Park. “The region’s fundamentals remain strong, but policy makers still need to pay attention to a number of risks that could affect the outlook, from uncertainty related to election outcomes in major economies to interest rate decisions and geopolitical tensions.”

While inflation is moderating toward pre-pandemic levels in the region as a whole, price pressures remain elevated in some economies. Food inflation is still high in South Asia, Southeast Asia, and the Pacific, in part due to adverse weather and food export restrictions in some economies.

The growth forecast for the People’s Republic of China (PRC), the region’s largest economy, is maintained at 4.8 percent this year. A continued recovery in services consumption and stronger-than-expected exports and industrial activity are supporting the expansion, even as the PRC’s struggling property sector has yet to stabilise. The government introduced additional policy measures in May to support the property market. The outlook for India, the region’s fastest-growing economy, is also unchanged at 7.0 percent for fiscal year 2024. India’s industrial sector is projected to grow robustly, driven by manufacturing and strong demand in construction. Agriculture is expected to rebound amid forecasts for an above-normal monsoon, while investment demand remains strong, led by public investment.

For Southeast Asia, the growth forecast is maintained at 4.6 percent this year amid solid improvements in both domestic and external demand. This year’s outlook for the Caucasus and Central Asia is raised to 4.5 percent from a previous projection of 4.3 percent, driven in part by stronger-than-expected growth in Azerbaijan and the Kyrgyz Republic. In the Pacific, the outlook for 2024 is maintained at 3.3 percent growth, driven by tourism and infrastructure spending, along with revived mining activity in Papua New Guinea.