ADB sees 2 percent growth in Pakistan in FY2021

The Asian Development Bank said it now expects Pakistan's economy to grow by 2 percent in the next fiscal year, compared with a previous forecast of nearly 3.2 percent.

ADB, in a supplement to its Asian Development Outlook (ADO), said Pakistan's economy was on the path to recovery before COVID-19 and a national lockdown initiated on 1 April.

"It is projected to contract by 0.4 percent in FY2020 (ending 30 June 2020) as the outbreak further restricts economic activity," the bank said

"Once the COVID-19 impact subsides, Pakistan will resume its efforts to address macroeconomic imbalances and initiate structural reform, likely holding economic growth to a projected 2.0 percent in FY2021."

The ADB also slashed its growth forecast for developing Asia this year to 0.1 percent from 2.2 percent to reflect the impact of the lockdowns on economic activity due to the coronavirus pandemic. The ADB kept its economic growth forecast for developing Asia for next year at 6.2 percent. "Developing Asia will barely grow in 2020 as containment measures to address the coronavirus disease (COVID-19) pandemic hamper economic activity and weaken external demand," the bank said.

"Economies in Asia and the Pacific will continue to feel the blow of the COVID-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ' new normal' scenario," said ADB Chief Economist Yasuyuki Sawada.

"While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V- shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur."

The bank said risks to the outlook remain on the downside. The COVID-19 pandemic may see multiple waves of outbreaks in the coming period and sovereign debt and financial crises cannot be ruled out. There is also the risk of renewed escalation in trade tensions between the United States and China.

Hit hard by COVID-19, South Asia is forecast to contract by 3.0 percent in 2020, compared to 4.1 percent growth predicted in April. Growth prospects for 2021 are revised down to 4.9 percent from 6.0 percent. India's economy is forecast to contract by 4.0 percent in fiscal year 2020, ending on 31 March 2021, before growing 5.0 percent in FY2021.

East Asia is forecast to grow 1.3 percent in 2020-the only subregion to experience growth this year-while growth in 2021 will recover to 6.8 percent. Economic activity in Southeast Asia is expected to contract by 2.7 percent this year before growing by 5.2 percent in 2021.

Central Asia's economic activity is expected to contract by 0.5 percent compared to the 2.8 percent growth forecast in April due to trade disruptions and low oil prices. Growth is forecast to recover to 4.2 percent in 2021.

Inflation for developing Asia is forecast at 2.9 percent in 2020, down from a forecast of 3.2 percent in April, reflecting depressed demand and lower oil prices. In 2021, inflation is expected to ease to 2.4 percent.

Chairman National Disaster Management Authority (NDMA) Lt Gen Muhammad Afzal Friday said a comprehensive national contingency plan has been devised to avoid flood losses during the impending monsoon season.

Addressing a pre monsoon conference in Islamabad, he said the plan has been finalised in consultation with all stake holders. The comprehensive strategy to deal with flooding was badly needed in the wake of COVID and locust invasion in country's various districts.

He said Integrated Early Warning System was being strengthened for more effective disaster risk reduction. He was sure that Provincial Disaster Management Authorities would remain vigilant to cope with any eventuality as almost all major cities of the country were vulnerable to flooding during the upcoming monsoon season.

He asked the relevant authorities in Karachi to clean all the drains of the city to avoid flooding.

While the civic authorities in Lahore, Gujranwala, Rawalpindi and Hyderabad should also ensure taking precautionary measures to effectively deal with the flash flooding in their respective areas.