Published On: Tue, Dec 29th, 2015

Pakistan Annual Forecast 2016

Pakistan Pursues Security

Supported by a three-year, $6.6 billion International Monetary Fund loan and buoyed by low oil prices, Pakistan’s economy will maintain its current growth rate of 4 percent in 2016. However, a weak business environment and a lack of reforms in the country’s distressed energy sector will inhibit further growth. The Iran-Pakistan pipeline and the Turkmenistan-Afghanistan-Pakistan-India pipeline will see little progress in spite of growing political support for them. The same is true for a $46 billion China-Pakistan economic corridor, a series of projects designed to link China’s western Xinjiang province with the port city of Gwadar on the Arabian Sea. (Balochistan, Pakistan’s large southwestern province in which Gwadar is located, is home to a Balochi insurgency that needs to be calmed before the cSouthAsia-2-Pakistan-General-Sharif- Annual Forecast 2016orridor can be functional.) Relations between Islamabad and New Delhi will remain stable as Pakistani Prime Minister Nawaz Sharif continues directing the military’s attention toward battling domestic Islamist militants — something that will work in Modi’s best interests, too.

Sharif will continue pursuing his campaign to establish a stable security atmosphere in Pakistan in the hope of making his country an attractive destination for much-needed foreign direct investment. Pakistan’s army chief, Gen. Raheel Sharif, will carve out a prominent role for the military in 2016 and serve as a key facilitator in talks between the Taliban and Kabul. Pakistan will continue to calibrate a delicate balance among Russia, China and the United States, as well as between Iran and Saudi Arabia. Islamabad will monitor the Saudi security situation with respect to Yemen and will even send military advisers to Riyadh, but it will be careful not to become too involved lest it invite Iran’s disapproval.

Complete Annual Forecast 2016

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