*ISLAMABAD: Pakistan’s economic growth rate to go down to 3.9% in fiscalyear 2019, the Asian Development Bank (ADB) said in a forecast on thecountry’s economy.*
The ADB in its publication titled “Asian Development Outlook (ADO) 2019,”said Pakistan’s GDP growth to drop to 3.9% in FY2019 as “macroeconomicchallenges will continue despite steps to tighten fiscal and monetarypolicies.”
“The expansionary fiscal policy markedly widened the budget and currentaccount deficits and drained foreign exchange,” the report observed.
The ADB report said inflation is expected to rise sharply to average 7.5%in FY2019, driven up by continued heavy government borrowing from thecentral bank, hikes to domestic gas and electricity tariffs, furtherincreases in regulatory duties on luxury imports, and the lagged impact ofcurrency depreciation by more than 10.7% since July 2018.
The water shortage would have an impact on the agriculture sector, whichwill fail to achieve its growth target, the bank’s report said.
The ADB report forecast further hike in inflation by the end of the fiscalyear.
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The report has predicted decrease in the current account deficit but saidit will remain on the higher side.
The country would have to borrow more to payback the external debt, thereport further said.
Inflation will remain elevated at 7.0% in FY2020, it added.
