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Report: Pakistan could become 16th largest economy

According to a report by the PricewaterhouseCoopers (PwC) – a multinational professional services network based in London regarded as one of the ‘Big Four’ auditors – estimated that Pakistan could become the world’s 16th largest economy by 2050 based on its GDP at purchasing power parity.

 

On a global level, that is very rich and projected to overtake economies such as Canada and Italy ranked 12th and 17th, respectively at the moment.

 

A table appended to the PwC report shows that on the basis of purchasing power parity, Pakistan would move up from its existing 24th place to 20th place ($1.87tn) by 2030; and to 16th place ($4.2tn) by 2050.
With regard to GDP at real market exchange rate, the country’s economy is likely to rise from its current 28th place ($284bn) to 27th by 2030 ($776bn); and to 19th ($2.8tn) by 2050.

 

GDP at purchasing power parity adjusts for price level differences across countries and offers a better measure of the volume of goods and services produced in an economy. Contrary to that, GDP at market exchange rate gives a better measure of the value of goods and services produced in an economy, converting a country’s GDP in national currencies to the US dollar based on current market exchange rates.

 

The remarkable thing about this economic growth is that it has come despite  political challenges faced by the ruling Pakistan Muslim League-Nawaz. PM  Nawaz has rarely had a respite in his third stint despite a comfortable majority at the Centre and in his home province of Punjab.

 

In 2016, Pakistan hit a major milestone when the International Monetary Fund declared the country had come out of an economic crisis and stabilised its economy after completing a bailout programme. With its improved credit rating and a massive boost from a $46bn CPEC project – pivoted around infrastructure, power and transport development – confidence in Pakistan’s economy has grown manifold.

 

Experts, however, say that the growth needs to be sustained over the long term.

“To realise this growth potential, emerging market governments need to implement structural reforms to improve macroeconomic stability, diversify their economies away from undue reliance on natural resources, and develop effective political and legal institutions”.

 

About Fawad Ahmed

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