Pakistan-Economy
Pakistan's economy is expected to remain strong growing at 6.5 percent supported by all sectors during the current year despite many challenges, according to a UN report released on Thursday.

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its Economic and Social survey appreciated Pakistan's macroeconomic policies of the last few years saying these helped increase the inflow of domestic and foreign investments and sustain a strong economic growth.

The survey says that sound policies have transformed Pakistan's consumption led growth impetus to the one in which investment led growth can assume a more important role.

It says Pakistan's economy remained strong during the last six years.

The agriculture sector grew by five percent during the last year while the manufacturing sector's growth continued at 8.4 percent.

It further says that record inflow of foreign direct investment amounting to 8.4 billion dollars last year also boosted performance of the economy.

It says that a credible debt reduction strategy and fast economic growth drastically cut the public debt burden, besides the country successfully reduced its external debt burden, through rescheduling, debt cancellation and prepayment of expensive debt.

Referring to the higher inflation level in the country, the survey says global increases in some commodity prices, higher utility tariffs and some other factors fuelled the inflation level in Pakistan.

However, the government made efforts to stem price rises through extension of public sector utility store network and extending subsidies on essential edibles.

The survey also highlights the government's expansionary fiscal stance to promote investment for growth and increase pro poor spending.

It also recognizes that development expenditure has increased in recent years.

However it expressed concern over sharp slowing in the growth of Pakistan's exports and imports during the last year.

The ESCAP survey predicts that like many other South Asian Countries, the current account deficit is to remain an issue for Pakistan due to higher oil prices and the impact on the garment and textiles trade.

The report suggests export diversification besides reducing the risk of depending too much on a single sector to meet the challenge.