CPEC (China-Pakistan Economic Corridor) has proved to be very fruitful for Pakistan and its economic growth. According to Moody’s, Pakistan will see an approximate GDP growth of 4.9% during this year.
In the last decade, Pakistan has not been able to achieve an economic growth rate of 5% per year but with the recent development in economic relations between Pakistan and China, the former should expect a growth rate of at least 4.9% in Gross Domestic Product.
CPEC is supposed to increase industrial production and development work in Pakistan and move its dependence away from the agricultural sector to the tertiary and secondary sector. Dependence on the agricultural sector has left Pakistan with a very low and unstable economic growth rate because of the fluctuating prices in the global market of its two main exports – rice and textile.
However, with CPEC, Pakistan is expected to become a manufacturing hub in the future years. This will also assist in urban growth and with proper planning more urban centers can pop up around the country, creating more employment for the future generations.
With CPEC, domestic energy production is predicted to become more efficient and cheaper thus improving the supply. The energy supply having been improved, the government hopes that investment in the domestic manufacturing industry will also rise.
Moody’s report on Pakistan’s GDP growth rate also commented on the strong banking sector which would further improve the situation in future years and even the current fiscal year.
The only reasons why this growth might slow down is the security situation in the country. With the return of terrorist attacks in major cities recently, Pakistan is in danger of having this good news reversed.