Pakistan's economy is advancing fast despite the devastation of last October's earthquake and the continued upsurge in international oil prices, the Asian Development Bank (ADB) said. “Economic activity remains dynamic and social indicators have improved, which augurs well for continued rapid development,” the ADB's Asian Development Outlook Update 2006 said. The report confirmed the continuation of fast growth stemming from the government's far-reaching macroeconomic and structural reforms initiated in 2001, which subsequently propelled the economy to annual expansion of about seven per cent over four years. The report underlined the main macroeconomic challenges like bringing down inflation and containing growing trade and current account deficits. The ADB Update is a supplement to ADB's annual flagship publication, Asian Development Outlook 2006, which was published in April, and forecasts economic trends in the region. According to the report, developing Asia's strong economic expansion is expected to continue, with growth projected at 7.7 per cent in 2006 before easing to 7.1 per cent in 2007. “The outlook for Asian growth is quite positive as both domestic and external conditions remain favourable,” said Ifzal Ali, ADB's Chief Economist at the launch of the ADB Update 2006. “The region should act now to lay defences against potential risks and ensure the region's rapid growth is sustained. The region should take advantage of this strength to act in three areas that could undermine growth if not addressed.” These three areas included the need to complete the adjustment to high oil prices, the need to pick up the pace of fiscal consolidation and the need to stimulate investment, he said. The 7.1pc growth forecast for 2006 represents a 0.5 percentage point increase from the April forecast.
