According to the Asian Development Bank (ADB), Pakistan’s interest payments are predicted to consume an astounding 62 percent of its fiscal receipts, up from 41 percent in 2022–2023.
According to the bank’s “Asian Development Outlook,” public debt in Pakistan is expected to drop by 7 percentage points to 70% of GDP in 2024–2025. Even still, it is anticipated that interest payments would account for an astounding 62% of fiscal receipts, up from 41% in 2022–2023.The bank went on to say that Pakistan likewise lowered policy rates over the same period last year, with inflation dropping from 38 percent in May to 11.8 percent.
Growth projections for ADO April 2024 in South Asia are expected to be mostly met. The GDP growth prediction for the area is expected to remain at 6.3 percent in 2024, as positive revisions for Bhutan, Nepal, and Pakistan in 2024 balance out downward revisions for GDP growth in Bangladesh and the Maldives during the forecast period. The growth estimate for 2025 has been somewhat lowered to 6.5 percent.
The government’s first estimate of GDP growth in Pakistan for FY2024, which ends on June 30, 2024, was 2.4%. This rise was attributed, among other things, to strong agricultural output brought about by favorable weather and government credit that was subsidized. While Sri Lanka’s economy performed better in the first quarter of 2024 than ADO’s April 2024 predictions, growth projections for 2024 and 2025 are kept unchanged due to lingering uncertainty around the start of the election cycle in the second half of the year.
Afghanistan’s economy is beginning to recover, but its fragility is highlighted by the unfavorable investment climate, limited budgetary flexibility, and declining foreign help for basic needs and humanitarian relief.
South Asia’s inflation projections are kept at 5.8 percent in 2025 but are pushed up to 7.1 percent in 2024. While the inflation estimates for Bangladesh and the Maldives are now anticipated to be higher, the inflation forecasts for Bhutan, India, and Pakistan for FY2024 and FY2025 are still the same as those from the April 2024 ADO.
