ISLAMABAD: The World Bank, in its latest report, has claimed that Pakistan’s modest economic recovery would continue, but the growth remained well below the 5.5 percent target envisaged in the country’s annual plan and the South Asia average of 7.5 percent.
According to the report, the country’s fast growing remittances rising investments under the China Pakistan Economic Corridor (CPEC) have supported economic growth of Pakistan.
Pakistan’s growth, the bank said, is expected to pick up to 4.5 percent from 4.2 percent. Like the rest of the region, the country is benefitting supported by low oil prices, high remittances and CPEC investment from low oil prices, which have reduced the trade deficit (despite a notable decline in exports) and increased consumption, it said.
The World Bank is of the view that structural challenges prevent Pakistan from growing as quickly as its neighbours. The effects of the high remittances and low oil price windfall (driving such high growth rates in the rest of South Asia) are somewhat hampered in Pakistan by its continuing domestic structural challenges.
The bank said that the government is making progress on the structural reforms that will be essential to safeguard growth. It also said that the government has made great strides in increasing foreign exchange reserves and has recently made progress in the power sector and revenue reforms, but its ambitious reforms agenda is necessarily a medium- to long-term plan.
Given the risks presented by the current global economic situation, these reforms will be necessary to safeguard Pakistan’s growth, the World Bank said.
