960414

Asian Bank sees

Pak GDP growth

at 5.5 percent

IKRAMUL HAQ

ISLAMABAD: The Asian Development Bank forecasts Pakistan's GDP growth in 1996 (calendar year) at 5.5 percent with agriculture playing a major role in boosting the economy in the next two years.

The Asian Bank's annual report-1995 released on Sunday says the country will continue to be plagued by high inflation around 13 percent.

It adds that combined with uncertain workers remittances the current account deficit will range between 4.5 percent and 5 percent of GDP.

The outlook for 1996 presented in the report warns that several countries of South Asia are faced with political uncertainty. "Their economic outlook will be influenced largely by the manner in which the current conflicts are resolved".

It adds that reducing poverty and improving income distribution remain long-term challenges for the sub-region.

The prospects of growth in 1996 for Bangladesh is around 3.6 percent, India 6.5 percent, Nepal 5.6 percent, and Sri Lanka 5.2 percent.

Reviewing the economic performance in 1995, the annual report says that South Asia maintained growth at 5.8 percent. India's GDP growth was 6.2 percent, Bangladesh 4.5 percent, Sri Lanka 5.6 percent and Pakistan 4.7 percent.

The ADB report noted that consumer price index in Pakistan in 1995 rose by 12.9 percent, while inflation in India declined to 9.5 percent; in Sri Lanka it was 7.7 percent; in Bangladesh 8.9 percent and in Nepal 7.6 percent.

In Pakistan the inflationary pressures remained strong as the price index rose by 12.9 percent, compared to the target of 7 percent, food prices rose particularly sharply. Increase in prices of several imported commodities and relaxed monetary and fiscal policies were primarily responsible for higher inflation".

It emerges from the report that though picking up in 1995, Pakistan's economic performance was still below the average in the sub-region, as was the position in 1994.