Asian Development Bank (ADB) has said economic reforms initiated in the past year contributed to improved economic conditions in Pakistan. In its Outlook 2014 Update Report, ADB has projected Pakistan's GDP growth for fiscal year 2014-15 at 4.2 percent. It said the projected GDP growth reflects easing of fiscal consolidation and increased allocations for public sector development spending.
The report forecasts that continuing reform and an improving security environment would further boost business confidence and foster private investment in the country. It said current fiscal year's budget aims further decreasing the deficit to 4.9 percent of GDP from 5.5 percent estimated for fiscal year 2014 through reduced expenditures.
However, the report also said that security concerns, political unrest and effects of flooding pose downward risks. As per the Outlook, ADB assumes that the government will make satisfactory progress on its economic agenda to reform the energy sector and state-owned enterprises, rationalise import tariffs and improve the business climate. It said the energy reforms include moving toward market-based pricing and improving system governance, efficiency and sustainability.
The report further said growth in Pakistan edged up, the budget deficit shrank, foreign exchange reserves strengthened and a sovereign bond issue enhanced policy credibility. It said several years of concerted national commitment will be required to eliminate electricity shortages and affect the structural reforms necessary to achieve high and inclusive growth.
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