In its latest report, Standard and Poor’s, an international rating agency, has referred to the construction sector of the country as one of the components essential for the growth of the economy. The agency projects the economic growth of the country at 4.5 percent from 2015 to 2018 provided the flow of remittances continues at the current rate, electricity supply is improved and foreign investment are increased. The agency also points out another issue that is related to the budget deficit and it can only be achieved if the government takes austerity measures. Due to drop in the prices of crude oil in the international market, inflation is likely to remain at five percent. The agency has maintained Pakistan’s rating at B and B- with a positive outlook.
Earlier, while keeping the rating of Pakistan’s foreign bonds in B3 category, the agency had warned against slow-pace of economic growth in the country. However, it also said that China-Pakistan Economic Corridor (CPEC) will boost economic growth and increase foreign investments. The project will also improve transport and energy sectors in Pakistan. The B3 rating reflects moderate economic strength with a supply-constrained economy that has been resistant to structural change. Despite having a large scale of economy, the country has one of the lowest per capita incomes in the region. It is hoped that the economic corridor will attract foreign investment in transportation and power generation sectors.
It is unfortunate that the government has started deducing withholding tax even on small saving schemes. The agencies also pointed out lack of cooperation between institutions which create obstacle in continuance of the policies. As a matter of fact, the consumer price index, risk ratings and composite numerical figures help understand the state of the economy. The government should also take the security issue seriously as terrorists activities are continuing across the country despite tall claims of the government that operation against terrorists bears positive results. It is said that actions speak louder than words. The government should have to stop lip service and should do some serious homework to stop terrorist activities.
As the Standard and Poor’s pointed out, the construction sector of the country can be a driving force for the overall development of the economy as middle class of the country is growing with leaps and
bounds. New housing colonies are being established in every city of the country, giving impetus to various industries associated with the construction sector. However, the government has to concentrate on security issues. Peace and economy are correlative and development of the economy cannot be achieved without the maintenance of a peaceful environment in the country.