Country Forecast Pakistan July 2018

Country Forecast Pakistan July 2018

  • July 2018 •
  • Report ID: 1697859 •
  • Format: PDF

Policy towards private enterprise and competition

2018-19: The government privatises some state-owned assets, but its efforts are hampered by political resistance.

2020-22: Efforts to liberalise the economy continue, but problems remain with bureaucratic and regulatory inefficiency.

Policy towards foreign investment

2018-19: Foreign investment remains concentrated in the telecommunications, banking, transport and energy sectors.

2020-22: The government's efforts to leverage Pakistan's high population and robust economic growth to attract foreign investment in consumer-oriented sectors see only limited success, amid continued high levels of macroeconomic risk.

Foreign trade and exchange controls

2018-19: Faced with an impending balance-of-payments crisis, the government imposes tighter import controls.

2020-22: Restrictions on currency convertibility are unlikely to be removed, but the State Bank of Pakistan (the central bank) becomes more independent and assertive.


2018-19: The corporate tax rate remains high by regional standards, but efforts are made to reduce it gradually. Indirect tax rates are raised to support an increase in the government's revenue collection.

2020-22: The tax system remains complex and inefficient. Most Pakistanis remain outside the tax net, but efforts to close tax loopholes for business and industry continue.


2018-19: Most lending consists of private bank loans to the public sector, but lending to the private sector grows modestly.

2020-22: Smaller private banks merge as competition in the banking sector intensifies. The Islamic finance subsector develops. The role of microcredit banks and branchless banking continues to expand.

The labour market

2018-19: Child and bonded labour remain a problem. The low literacy rate curbs growth in the supply of skilled labour. Female labour-force participation remains low compared with the rest of Asia and globally.

2020-22: There is a risk of labour unrest as the government proceeds with its plans to privatise state-owned enterprises.


2018-19: The Thar-I and Thar-II coal-fired power plants, under the China-Pakistan Economic Corridor (CPEC), come on stream, adding generating capacity of 2,640 MW. Construction of an international airport in Gwadar begins.

2020-22: Power plants based on renewable energy are built to diversify electricity generation.

Technological readiness

2018-19: The crossborder optical fibre cable project under CPEC is completed, connecting the Gilgit-Baltistan region.

2020-22: Construction of Pakistan's second submarine cable landing station begins at Gwadar port.


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