Pakistan GDP to pick up to 7% in the Year: World Bank
Pakistan Times Business & Commerce Desk

WASHINGTON: South Asia has witnessed a strong economic growth and Pakistan's GDP is expected to pick up to a robust 7 per cent in the year, according to a new World Bank report.

The report "Global Economic Prospects - Managing the Next Wave of Globalization" was released Thursday.

Expansion in agricultural production and increased capacity following government infrastructure investments and private sector investments in the textile sector are some of the factors bolstering the economic growth in Pakistan in the current year.

In 2006, the report says the GDP in South Asia is estimated to have expanded at a very rapid pace of 8.2 per cent.

Progress in promoting private sector­led growth, improved macro-management, greater integration with the global economy strong remittance inflows and strong external demand contributed to high growth in South Asia.

The GDP in South Asia is projected to be 7.5% in 2007 and 7% in 2008.

The Bank said globalization could spur faster growth in average incomes in the next 25 years than during 1980-2005, with developing countries playing a central role.

According to the report’s lead author and Economic Advisor in the Trade Department, Richard Newfarmer, developing country growth in the world has accelerated over the past decade and is expected to remain strong both over the medium and longer terms.

"We expect that growth rates for developing countries this year will be 7 percent and exceed 6 percent in 2007 and 2008, more than twice as fast as high-income countries, which are expected to grow about 2.6 percent."says Hans Timmer, the manager of the Bank's forecasting team.

Newfarmer says developing economies will become a major locomotive of the global economy.

"We expect developing economies share in world trade to rise to almost 50 percent by 2030,” he says.

"That's a substantial increase from where we are today at about 30 percent. Moreover, their share in world GDP could reach 60 percent in purchasing power parity terms."

The report says benefits of that growth will be widespread, with the incidence of dire poverty falling from around 25 percent today to less than eight percent.

However the report also says some groups may be left behind, with unskilled workers especially vulnerable.

The report predicts that globalization will expand the global economy from US dollars 35 trillion in 2005 to US dollars 72 trillion in 2030.●