The devastating floods in 2022, the impact of the COVID-19 pandemic, security issues, structural risks, and adverse external shocks continue to pose major economic challenges to Pakistan, says the Asian Development Bank (ADB).
The bank in its report, “Factsheet on Pakistan”, stated that uncertainties and institutional factors continue to weigh on project implementation. These include land acquisition procedures, procurement delays caused by restrictions, and price fluctuations affecting the importation of construction materials.
However, tri-partite portfolio review meetings among ADB, the government, and executing agencies help resolve project implementation issues. Continued efforts toward fiscal consolidation and policy reforms will be key to improvements in macroeconomic recovery and stability, especially in broadening the tax base and improving the business environment in the country.
The report noted that reforms are required to promote high-value-added exports, expand social spending, reinforce the energy sector’s financial and technical sustainability, and implement structural changes that will strengthen institutions and create jobs.
The ADB’s country partnership strategy, 2021–2025, for Pakistan, focuses on three priorities—improving economic management, building resilience, and boosting competitiveness and private sector development.
To date, the ADB has committed 740 public sector loans, grants, and technical assistance totaling $39.7 billion to Pakistan. Cumulative loan and grant disbursements to Pakistan amount to $30.76 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds.
The ADB’s ongoing sovereign portfolio in Pakistan includes 53 loans and three grants worth $9.59 billion. In 2022, the ADB’s loan and grant disbursements to Pakistan amounted to $2.49 billion. This includes $1.8 billion in program lending, $680 million from project lending, and $4.6 million from grants.
The ADB provided $1.5 billion to help Pakistan boost social protection, promote food security, and support employment for people.
Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Pakistan as of 31 December 2022 was $242.48 million representing 1.9 percent of the ADB’s total private sector portfolio.
