DUBLIN, Aug. 16, 2023 /PRNewswire/ — The “Pakistan Construction Market Size, Trend Analysis by Sector (Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential) and Forecast, 2023-2027” report has been added to ResearchAndMarkets.com’s offering.
The construction industry in Pakistan is bracing for a significant contraction of 5.2% in the current year, following a decline of 2.8% registered in 2022.
Persistent economic strains, political uncertainties, and financial instability within Pakistan have contributed to the projected decline in the construction sector this year.
The country’s substantial current account deficit, coupled with high levels of public debt and diminished foreign exchange reserves, are anticipated to exert considerable pressure on the construction domain. Moreover, the economy’s grappling with elevated inflation rates and soaring energy and construction material costs will further contribute to the dampened construction activity in the year.
In order to secure a $1.1 billion tranche of IMF funding before the expiry of the IMF’s Extended Fund Facility on June 30, 2023, the Pakistani government has significantly tightened its FY2023 budget. The government has been forced to cut spending, increase its tax base and lift restrictions on imports, with the depletion of Pakistan’s foreign exchange reserves increasing its reliance on IMF funds in order to prevent a default on its external debt.
Pakistan’s economic woes have been further compounded by soaring rates of inflation, with annual consumer price inflation rising to 37.97% in May 2023. Pakistan’s central bank continues to hike interest rates in response, raising its benchmark interest rate by 100 basis points to 22% in June 2023, and this will weigh on both public and private construction investment this year.
The industry’s growth over the remaining part of the forecast period will be supported by investment in transport, electricity, housing, telecommunication,…