Growth rate lags behind those of South Asian states: Escap

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Growth rate lags behind those of South Asian states: Escap

ISLAMABAD (May 15 2010): Pakistan lagged behind other countries in the South Asian region in terms of GDP growth rate, according to the 'Economic and Social Survey of Asian and Pacific 2010' by ESCAP of United Nations. Real GDP growth rate of Pakistan in 2009 was only 2 percent, as compared to 7.2 percent of India and 5.9 percent of Bangladesh, while the growth rates of Nepal and Sri Lanka were 4.7 and 3.5 percent respectively in 2009.

Analysis of the data showed that GDP growth was increasing in Pakistan after 2002, or post-9/11 after the US launched an attack on the Taliban regime in Afghanistan, and went up to as high as 9 percent in 2005. Thenceforth it began to decline as donors began to question the efficiency and efficacy of their assistance by the Pakistan government.

Pakistan performed better than Nepal in terms of gross domestic savings - 11.2 percentage of GDP compared to 8 percentage of Nepal while saving rate of India, Sri Lanka and Bangladesh were substantially highest 34.5percent, 15.6 percent and 20 percent respectively in 2009.

The gross domestic investment rate of 19.7 percentage of the GDP was witnessed by Pakistan in 2009 - low as compared to other countries in the region. The domestic investment rate of India and Bangladesh was 36.5 percent and 24.2 percent respectively in 2009 whereas Sri Lanka and Nepal had domestic saving rate of 25.5 and 29.7 percent.

The gap between savings and investment partly accounted for the high rate of inflation in Pakistan. It registered a whopping 20.8 percentage in 2009, much higher compared to other regional countries. India registered an inflation of 11.9 percent while Nepal, Bangladesh and Sri Lanka registered the rate of 13.2 percent, 6.7 percent and 3.4 percent respectively. Pakistan's budget deficit was 5.2 percentage of the GDP in 2009, according to the ESCAP report, compared to 4, 3, 6.5 and 7 percentage of GDP in Bangladesh, Nepal India and Sri Lanka.

Business Recorder [Pakistan's First Financial Daily]