Pakistan can be sixth largest economy by 2075: Goldman Sachs

A right set of policies and their execution can turn Pakistan into the world sixth largest economy by 2075, predicts Goldman Sachs in a latest report, with India being the second surpassing the US.

“The Path of 2075”, which covers 104 countries, says the top economies would be China, India, the US, Indonesia, and Nigeria.

In their report, Goldman Sachs economists Kevin Daly and Tadas Gedminas made the forecast on the basis of GDP and population growth, technical progress and capital contribution.

“The prospect of rapid population growth in countries such as Nigeria, Pakistan, and Egypt implies that – with the appropriate policies and institutions – these economies could become some of the largest in the world,” the report read.

By this time, Pakistan’s Real GDP is forecasted to have grown to $12.7 trillion while the GDP per capita will grow to $27,100.

However, Goldman Sachs have also listed the risks that could hamper the progress – populist nationalism and environmental catastrophe.

Populist nationalism

The key risk, according to Goldman Sachs, to the long-term projection includes populist nationalism and environmental catastrophe.

It notes that populist nationalism leads to increased protectionism and a reversal of globalization. Populist nationalists have gained power in several countries and the supply chain disruptions during the Covid pandemic have resulted in an increased focus on on-shoring and supply chain resilience, the report said.

At least to date, this has led to a slowdown rather than a reversal of globalization. However, the risk of a reversal is clear.

Globalization has been a powerful force in reducing income inequality across countries but, to ensure that it continues to do so, greater efforts need to be made to share its benefits more equally within countries, it noted.

Environmental sustainability

Meanwhile, the report rejects the view that economic growth and environmental sustainability are incompatible. Many countries have been able to ‘de-couple’ economic growth from carbon emissions, so there is no practical reason why this should not be achievable for the global economy as a whole.

But achieving sustainable growth requires economic sacrifices and a globally coordinated response, both of which will be politically difficult to achieve. This risk is especially relevant to the long-term economic outlook of low-income economies with geographies that are especially exposed to climate change.

Pakistan and G-20

Earlier in 2017, PricewaterhouseCoopers (PwC) in its report titled ‘The World in 2050’ had stated that Pakistan was likely to become the world’s 20th largest economy by 2030, outpacing Thailand, Australia, Malaysia, Poland, South Africa and the Netherlands.

However, the promise didn’t materialise as Pakistan faced political upheaval – sentencing of the then prime minister Nawaz Sharif, controversial elections in 2018 uncertainty, governance issues and change of government yet again – since then.

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