The Asian Development Bank (ADB) in an update of its Asian DevelopmentOutlook (ADO) 2020 report has forecasted broad economic recovery forPakistan in FY2021, with GDP growth estimated to rebound to 2.0 percent.
The projected GDP growth is lower than forecast in ADO 2020. As per thelatest forecast, the ADB assumes that the COVID-19 impact will subside bythe end of 2020—the end of the second quarter of FY2021—allowing globalconditions to normalize and economic sentiment to improve.
The report also assumes the resumption of structural reform under anongoing IMF Extended Fund Facility program to address macroeconomicimbalances. The government has proposed detailed economic stimulationmeasures in its FY2021 budget.
In addition to reallocating Rs7 billion from the Federal Public SectorDevelopment Programme budget to COVID-19 response, the proposed budgetraises allocations for initiatives that provide social protection to thedisadvantaged.
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ADB was of the view that the flagship Ehsaas program will be scaled up fromRs190 billion in FY2020, or 2.3pc of government expenditure, to Rs230billion in FY2021, or 2.6pc.
