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Prices in Pakistan expected to surge: ADB

Prices in Pakistan expected to surge: ADB

Adjustments to energy tariffs, higher global commodity prices


Prices in Pakistan expected to surge: ADB

ISLAMABAD – The Asian Development Bank (ADB) has warned that domestic prices in Pakistan are expected to increase due to the adjustments to energy tariffs and higher global commodity prices.

“Much of the forecast upgrade reflects a higher projection for Pakistan, where adjustments to energy tariffs and higher global commodity prices are expected to exert upward pressure on domestic prices,” said ADB’s latest estimates, presented in a regular supplement of the Asian Development Outlook (ADO) 2021. In Pakistan, the ADB said, cotton and sugarcane production increased with favorable weather, while services bounced back as mobility tracking measures recovered beyond levels in March 2020, before the pandemic.

The ADB has also revised its economic growth outlook for developing Asia down slightly to 7 percent this year and 5.3 percent next year, after renewed outbreaks of coronavirus disease (COVID-19) led to slower growth in the third quarter. The ADB’s latest estimates, presented in a regular supplement of the Asian Development Outlook (ADO) 2021, compare with the bank’s September forecasts of 7.1 percent growth for 2021 and 5.4 percent for 2022.

“Developing Asia’s steady progress in dealing with COVID-19, through continued vaccination drives and more strategic application of containment measures, helped boost growth prospects in the early part of the year,” said ADB Acting Chief Economist Joseph Zveglich, Jr. “However, new outbreaks in the third quarter muted gross domestic product growth, and the advent of the Omicron virus variant is causing renewed uncertainty. Recovery efforts will have to take these developments into consideration.”

The main risk to the growth outlook remains resurgence in COVID-19 cases. The average number of daily cases globally rose to almost 573,000 on 30 November from 404,000 on 15 October. Developing Asia’s vaccination rate has increased significantly to 48.7% (fully vaccinated) as of 30 November, although the region still lags behind the United States at 58.1% and the European Union at 67.2%. Rates of fully vaccinated people also vary widely within the region, from as high as 91.9% of the total population in Singapore to as low as 2.2% in Papua New Guinea.

Bucking the overall trend for developing Asia, Central Asia’s economy is expected to grow 4.7% this year, reflecting higher commodity prices and increased public spending. The forecast for next year has also been raised to 4.4% from 4.2% in September. 

East Asia’s growth outlook has been downgraded by 0.1 percentage points for both 2021 and 2022, to 7.5% and 5.0%, respectively, amid slight downward adjustments in the forecasts for the People’s Republic of China (PRC)—the region’s largest economy. The PRC’s economy is now expected to grow 8.0% this year and 5.3% next year.

South Asia is forecast to grow 8.6% in 2021, compared with September’s forecast of 8.8%. The subregion’s 2022 outlook remains at 7.0%. India, South Asia’s largest economy, is now expected to grow 9.7% in fiscal year (FY) 2021, which ends 31 March 2022. The reduction of 0.3 percentage points comes amid supply chain issues that are affecting industry. India’s outlook for FY2022 is maintained at 7.5%, as domestic demand is expected to normalize.

Southeast Asia’s 2021 outlook has been revised down by 0.1 percentage points to 3.0% as economies in the subregion imposed targeted restrictions in the face of COVID-19’s Delta variant. Next year’s growth forecast is increased to 5.1% as economies are expected to continue easing overall restrictions and reviving economic activities. The growth forecast for the Pacific is maintained at -0.6% this year and revised slightly down to 4.7% for 2022. Regional inflation is expected to remain manageable at 2.1% in 2021 and 2.7% in 2022, allowing for a more accommodative monetary policy and supporting pandemic recovery efforts.


Source: The Nation

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