Islamabad: Pakistan’s economy expanded almost 5.3% in the last year, the country’s finance minister said on Thursday, as its gross domestic product (GDP) crossed $300 billion for the first time.
The growth rate, the highest in a decade, comes amid a construction boom linked to a $50-billion Chinese investment plan to upgrade transport and power infrastructure and build the China-Pakistan Economic Corridor (CPEC), and as the country’s overall security situation has improved.
But a report unveiled by finance minister Ishaq Dar also noted that headline inflation was up 4.1% compared to 2.8% in the previous financial year, while the tax-to-GDP ratio—a key indicator of self-sufficiency—remains a relatively low 10.7%.
“We are now targeting 6% growth for next year," he said.
Dar added the per capita income grew by 6.4% in the financial year 2017 to $1,628.80 as compared to 1.1% last year.
Confidence in Pakistan is growing, with the International Monetary Fund (IMF) saying in October that the country had emerged from crisis and stabilised its economy after completing a bailout programme.
Pakistan’s credit rating has also improved, though foreign investment remains poor compared to its neighbors.
Economists believe the country will need to register sustained growth of 6-8% over several years to make a significant dent in poverty and provide enough jobs for its youth.