The country’s economy is going in the right direction and is likely to grow 5 per cent or above in the current fiscal year, owing to the agricultural growth and investment in China Pakistan Economic Corridor (CPEC) projects, said Bilal Khan, a senior Economist at the Standard Chartered Bank (SCB).
In a short briefing to journalists here on Tuesday, he said, “Our projection of country’s Gross Domestic Product (GDP) is 5 per cent in 2016-17, but it is growing rapidly and may cross the 5 per cent benchmark in this fiscal year.”
“The government policies regarding the agriculture industry have supported the agri-products, adding that the investment in the on-going CPEC projects will further improve energy needs in the next few months as the government claims”, he said.
Bilal said that the State Bank of Pakistan (SBP) will not relax the monetary policy because of the rising trend in inflation, but it may hike 25 basis points in its discount rates in its next monetary policy. It depends on the rising international oil prices and its impact on the local market.
He further claimed that foreign direct investment has so far not improved because of the law and order situation and policies. However, it is expected that FDI and remittances would support the current account deficit of the country in the near future.
He said, “The exchange rate of Dollar is stable in Pakistan since the last two years and we are not expecting any change in the future.” However, it depends on the government policies, he further added.
Executive Director & MENA Economic Research, Dima Jardaneh, at SCB said, “2017 looks set to pan out very differently from previous years, with a veritable jungle of risks and opportunities lurking ahead.”
She said that the election of Donald Trump as US president is changing the global environment. After years of seeing monetary easing as the only game in town to support growth, global markets are reacting positively to Trump’s victory, anticipating that the US will enter a period of fiscal expansion. Tax cuts and infrastructure investments are expected to revive and boost the US economy, which would be positive for the global economy.
