Haq's Musings: HKS

Tuesday, October 9, 2018

HSBC: Pakistan Among World's Fastest Growing Economies Till 2030

Recently released HSBC report titled "The World in 2030" says that "five Asian economies will be among the world’s six fastest-growing economies – Bangladesh, India, Philippines, Pakistan and Vietnam". HSBC ranks Pakistan at number 4 in terms of GDP growth till 2030 and expects Pakistan to rise from the world's 40th biggest economy in 2018 in nominal terms to the world's 30th largest economy by 2030. Pakistan economy does face some short-term headwinds because of its balance of payments crisis requiring an IMF bailout. However, longer term prospects for growth look good.

American business publication Wall Street Journal has produced a short video explaining how its staff sees what it describes as "US-China conflict brewing in Pakistan". What is at stake in the battle between China and the United States in Pakistan is the prize of global superpower status. Whoever wins in Pakistan will become the number one global superpower, says the Wall Street Journal.

Pakistan 4th Among Top 10 Fastest Growing Economies. Source: HSBC

The HSBC report authors look at 75 economies in developing, emerging and frontier markets to make long-term projections of their growth potential and changes in global rankings. They conclude that emerging economies will account for roughly 50 per cent of global GDP by 2030 – a "seismic shift from half of that in 2000".

The report forecasts that Asia will continue to be the biggest driver of global economic growth and highlights that "China will be the world’s largest economy in 2030, overtaking the US, while India - currently the seventh biggest - will be third, pushing Germany and Japan down a position".

An earlier 2017 report by Harvard University's Kennedy School's Center for International Development (CID) at Harvard University forecast Pakistan's annual GDP growth to average 5.97% over the next 8 years, ranking it as the world's 6th fastest growing economy.

Growth Projections. Source: HKS CID Report

The Harvard growth projections are a bit more optimistic that other short, medium and long-term GDP growth forecasts for Pakistan offered by HSBC's 5% through 2050, IMF's 5.5% till 2020, World Bank's 5.8% until 2019 and The Economist EIU's 5.7% in 2017

Among the top 10 fastest growing economies, the CID projects Uganda to grow the fastest at 7.73%, followed by India 7.72%, Tanzania 6.66%, Senegal 6.49%, Madagascar 6.07%, Kenya 5.98%, Pakistan 5.97%, Indonesia 5.82%, Mali 5.75%, Turkey 5.64% and Philippines 5.43%.

Among Pakistan's other neighbors, Harvard Kennedy School forecast China to grow at 4.41%, Sri Lanka at 3.77% and Bangladesh at 2.82%.

Pakistan economy does face some short-term headwinds because of its balance of payments crisis requiring an IMF bailout. However, longer term prospects for growth look good. Improved security situation and rising investments, particularly the China Pakistan Economic Corridor or CPEC-related investments led by China, are helping accelerate the economic growth in the country. It is the fear of CPEC's success that appears to be driving a growing campaign of fear, uncertainty and doubt (FUD) waged by Pakistan's detractors in South Asia region and around the world. American business publication Wall Street Journal has produced a short video explaining how its staff sees what it describes as "US-China conflict brewing in Pakistan". What is at stake in the battle between China and the United States in Pakistan is the prize of global superpower status. Whoever wins in Pakistan will become the number one global superpower, says the Wall Street Journal.