In brief
Risks to political stability will grow in the run-up to parliamentary elections in 2018. We expect the ruling party to secure re-election thanks to robust economic growth and progress in addressing electricity shortages under the China-Pakistan Economic Corridor (CPEC). China's heavy investment in Pakistan will bind the nations even closer together but could lead to some complacency in Pakistan. Indeed, we are concerned that macroeconomic risks are gradually building up again.
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Economic growth
| (% unless otherwise indicated) | |||
| 2016 | 2017 | 2018 | |
|---|---|---|---|
| US GDP | 1.6 | 2.2 | 2.1 |
| OECD GDP | 1.7 | 1.9 | 1.7 |
| World GDP | 2.2 | 2.6 | 2.4 |
| World trade | 1.9 | 2.9 | 2.7 |
| Source: The Economist Intelligence Unit | |||
Inflation indicators
| (% unless otherwise indicated) | |||
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| US CPI | 1.3 | 1.7 | 1.9 |
| OECD CPI | 1.6 | 1.9 | 1.9 |
| Manufactures (measured in US$) | 6.0 | 3.7 | 4.7 |
| Oil (Brent; US$/b) | 59.0 | 61.5 | 64.0 |
| Non-oil commodities (measured in US$) | -0.5 | -1.5 | 2.1 |
| Source: The Economist Intelligence Unit | |||
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Financial variables
| (% unless otherwise indicated) | |||
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| US$ 3-month commercial paper rate (av; %) | 0.8 | 0.2 | 0.5 |
| Y 3-month money market rate (av; %) | 0.1 | 0.1 | 0.1 |
| Y:US$ (av) | 100.5 | 100.2 | 99.9 |
| Rmb:US$ (av) | 7.39 | 7.18 | 7.03 |
| Source: The Economist Intelligence Unit | |||