The Asian Development Bank (ADB) has enhanced Pakistan's growth forecast for the year 2012 to 3.7 from 3.6 percent projected earlier. For Asia, the bank has scaled back 2012 and 2013 growth forecasts, saying that after years of rapid growth, the region must brace for a prolonged period of moderate expansion amidst an ongoing slump in global demand.
In its Asian Development Outlook 2012 Update, the bank predicted Pakistan's growth at 3.7 percent, which was early predicted at 3.6 percent by the Asian Development Outlook released in April this year. It is pertinent to mention here that the Asian Development Outlook and the Asian Development Outlook Update are ADB's flagship economic reports, which analyse economic conditions and prospects in Asia and the Pacific, and are issued in April and October, respectively. The report has projected the same growth rate of 3.7 percent for the next year (2013) against the prediction of four percent.
The report has scaled back 2012 and 2013 growth forecasts for India, which will slow to 5.6 percent in 2012, down from 6.5 percent in 2011. Chinese economy is forecast to grow by 7.7 percent this year and 8.1 percent in 2013, a drop from the 9.3 percent posted in 2011. For overall South Asia, the growth has been predicted at 5.5 percent as compared to 6.2 percent in 2011.
The report projects the region's gross domestic product (GDP) growth dropping to 6.1 percent in 2012, and 6.7 percent in 2013, down significantly from 7.2 percent in 2011. The report notes that the ongoing sovereign debt crisis in the Euro area and looming fiscal cliff in the US could have disastrous spillovers to the rest of the world, particularly developing Asia. The projected slowdown is likely to ease price pressures, however, with inflation falling from 5.9 percent in 2011 to 4.2 percent for both 2012 and 2013, assuming there are no spikes in international food and fuel prices.