ISLAMABAD - The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) have projected that Pakistan's economic growth will pick up to 4.1 per cent in the fiscal year 2014.
"There have been some positive changes in the economy in recent months, such as improved growth of large-scale manufacturing industries, expansion in private sector credit, accumulation of foreign exchange reserves, and local currency appreciation" said a UNESCAP report launched in Bangkok yesterday.
Highlighting Pakistan's briefing note, the UNESCAP in a statement said that the country's economic growth slowed to 3.7 per cent in the fiscal year 2013 from 3.8 per cent a year earlier.
It said that agricultural output growth decelerated in 2013 due to poor weather conditions, while industrial production picked up on capacity enhancement and investment in alternate energy, especially by large-scale manufacturing operations.
On the demand side, the UN report further said that an impetus to growth came from private and public consumption, whereas overall investment remained sluggish.
"The investment-to-GDP ratio fell slightly to 14.2 per cent of GDP in 2013, which is lower than most other economies in South and South-West Asia," it said.
The UNESCAP added that inflation softened but still high as it decreased to 7.4per cent in 2013, although the impact of the depreciating currency was felt in the later part of the year.
"The currency has appreciated in recent months, which should help contain inflation in the current fiscal year," the UN report said. It further said that Pakistan's current account deficit shrank and goods exports rebounded in 2013 after a contraction in 2012.
The UN report said that the pickup was mainly fuelled by revived import demand from developed economies. The export items are typically low value-added and concentrated in textiles and garments, it added.
The report said that the current account deficit decreased to one per cent of GDP in 2013, from 2.1 per cent of GDP in 2012.
In addition to the export rebound, the government addressed a trade deficit by introducing measures to curb gold imports, the UNESCAP report said.