Remittances will be sustained at the high level attained in 2001-02, as these have mostly resulted from a shift from the hundi system to banking channels. Overall, the surplus in the current account of the balance of payments, however, is expected to be smaller than last year.
The medium-term prospects for the Pakistan economy have improved due to reprofiling of foreign bilateral debt, improvement of relations with the G-7 countries, greater access to the European Union markets, and modernization of textile industry underway for the last couple of years.
If the government continues to pursue sound macroeconomic policies and implement the planned governance reforms, it should be possible to achieve the growth target of 5 per cent, set for 2003-04 in the medium-term macroeconomic framework under the Poverty Reduction and Growth Facility.
The Pakistan economy demonstrated great resilience during 2001-02 in the face of external shocks generated by the post-September 11, 2001, developments, tensions with India, global recession, and continuing drought.
Macroeconomic fundamentals improved further, and the real GDP growth rate increased to 3.6 per cent from 2.5 per cent in 2001-02, the annual inflation rate declined to 2.8 per cent from 4.4 per cent, and the current account of the balance of payments posted an unprecedented large surplus.
The medium-term prospects for the Pakistan economy have improved due to reprofiling of foreign bilateral debt, improvement of relations with the G-7 countries, greater access to the European Union markets, and modernization of textile industry underway for the last couple of years.
If the government continues to pursue sound macroeconomic policies and implement the planned governance reforms, it should be possible to achieve the growth target of 5 per cent, set for 2003-04 in the medium-term macroeconomic framework under the Poverty Reduction and Growth Facility.
The Pakistan economy demonstrated great resilience during 2001-02 in the face of external shocks generated by the post-September 11, 2001, developments, tensions with India, global recession, and continuing drought.
Macroeconomic fundamentals improved further, and the real GDP growth rate increased to 3.6 per cent from 2.5 per cent in 2001-02, the annual inflation rate declined to 2.8 per cent from 4.4 per cent, and the current account of the balance of payments posted an unprecedented large surplus.