In the race of becoming the largest world economy, every country around the globe makes different plans and schemes every year to progress economically. This is not different for Pakistan as the country is starting to grow economically and might hit the highest mark this year. Foreign investments have increased and Export-Import banks have been established. 2017 might be the biggest year in economy of Pakistan. Here are some predictions on how Pakistan’s economy trend is likely to evolve during the year:
Due to a constantly dwindling production of cotton, the progress of agricultural field will remain constant.
After the initiation of CPEC, Pakistan will need about 100,000 trucks for the purpose of transporting machinery and other materials. This demand for vehicles may not be completed in time. Due to this, the use of imported cars will continue to rise. Companies like Volkswagen, Nissan, Kia, and Renault have already shown keen interest in establishing their manufacturing plants in Pakistan, but the environment to do so is nowhere to be found right now which means that production of these cars will also not start this year. As a result, the prices of the cars will remain stationary as companies such as Toyota, Honda, and Suzuki remain in charge of the automobile industry.
As technology progresses day by day; mobile banking, smart banking, and branchless banking will increase.
Pakistan has a national debt of $73 billion and in the coming period, this will continue to grow.
It is estimated that there will be slight decrease in the debt to GDP ratio of Pakistan which is currently at 64.8 percent.
Ease of Doing Business Index
Out of 190 countries in the index, Pakistan has been ranked at the 144th position. In World Bank’s 2017 Business rankings, Pakistan has been among the top 10 countries. This position might improve as the country progresses and we might see a change in position by the year 2018.
Due to the decline in cotton production and Pakistan’s low global competitiveness, exports are expected to decline.
Export-Import Banks have been established and are expected to start working in June. This bank will provide great help for exporters and importers.
The finance sector will play a big part in developing economy of Pakistan by focusing solely on financial inclusions and providing opportunities to small businesses and commercial banks.
Foreign Direct Investment
Amazingly, foreign direct investment has crossed the $1 billion mark mainly due to the biggest investment in December by Netherlands.
The foreign exchange reserves will remain the same i.e. $23-24 billion.
Pakistan’s GDP is expected to grow by 4.7 percent in 2017. GDP growth forecasts by International Monetary Fund, World Bank and federal budget also show that Pakistan’s annual GDP is likely to increase from $270 billion to $300 billion. Furthermore, it is also expected that the Purchasing Power Parity will cross the $1 trillion mark in 2017. In the world’s largest economy ranking index, Pakistan has acquired the 40th position and it might increase by one or two in the following years.
As the price of oil has declined, it is expected to stay there and as a result inflation will remain between 4-5 percent.
Remittances are expected to reach as high as $20 billion.
Retail will increase as there are ongoing projects for the development of large shopping malls. In addition, hundreds of superstores will also become operational by the end of 2017.
Large amount of money will come as Pakistan will make a place in MSCI’s Emerging Markets category in May. For those who don’t know MSCI is a leading provider of international investment decision support tools. 46 percent returns by the Pakistan Stock Exchange were recorded in 2016. Moreover, having 48,000 points currently, the KSE-100 benchmark index is also estimated to reach 55,000 points. As the Pakistan stock exchange will deliver 40 percent of its stakes to China, the arrival of large investors is guaranteed.
The number of tax payers is expected to reach 1.2 million in 2017.
As far as the economy of Pakistan is concerned for the year 2017, what are your thoughts?