Growth in Pakistan
A considerable source for foreign investment via the China–Pakistan Economic Corridor is already present in Pakistan. Established since 2013, the CPEC is a massive development scheme consisting of an assemblage of infrastructure projects under construction already throughout Pakistan. The purpose of the CPEC is to modernize the country’s infrastructure, including its highways, pipelines and railways and boost economy via development of transportation networks, energy projects and special economic zones. In time, CPEC will serve as a vehicle of trade through the construction of an overland route which will bridge China to the Indian Ocean, by connecting Gwadar (Pakistan) with Kashgar (China).
According to a recent World Bank report (“Globalization Backlash”), Pakistan’s growth prospects continue to advance with a push from the services and industrial sector. A target of 6% was set for 2017–18 and according to World Bank, the “average headline inflation for Jul-Feb FY18 remained 3.8 percent compared to 3.9 percent in Jul-Feb FY17, well below the target of 6 percent for FY18.”
However, growth is expected to continue even if the target is not met. Inflation continues to remain confined and is presently at 3.68% (year-on-year in April 2018). The IMF expects growth to pick up in 2018–19. Thanks to the China-Pakistan Economic Corridor, CPEC (the value of which is now worth $62 billion), a healthy domestic consumption, recovery in exports and robust credit development, the growth had been steady in early stages of the fiscal year 2017–18 and reached an average of 5.9% over the medium term. CPEC is targeted to modernize Pakistan’s infrastructure and reinforce economy through building of transportation grids, several energy projects and special economic zone development.
For fiscal year of 2017/18, US credit rating agency Moody’s Investors Service forecasted real GDP growth at 5.5 percent and predicted 5.6 percent for FY2019. It reported that “Infrastructure investment and solid domestic demand will prove to be the main drivers of economic growth and will fuel lending growth of 12–15 percent for 2018.”
The Corporate Rehabilitation Bill, 2018, of Pakistan, offers a method of rehabilitation of distressed companies which is necessary for maintainable development of the corporate sector. This bill is a portion of a detailed legislative plan focused on the restructuring and rehabilitation of distressed companies in Pakistan, and which provides an accord for all pertinent investors.
