In its a biannual publication on the state of the economy and its future prospects, the World Bank has projected Pakistan’s gross domestic growth rate at 5.5 percent for 2017-18 and 5.8 percent for 2018-19, on the ground that the government will be able to handle political and security risks in the coming years. The bank has projected the growth of over five percent despite increase in macroeconomic imbalances during the last financial year and expected increase in oil prices in the international market. Officially launching the report, Pakistan Development Update, World Bank country director llango Patchamuthu stressed the need for continuation of economic reforms and policies to enable the country compete in the international market. The bank also believes that healthy contribution from wholesale and retail trade and transport, storage and communications will push forward the rate of growth in the gross domestic product while marginal recovery in remittances sent by Pakistani expatriates from abroad and higher government expenditure due to the elections will also play their role in the growth rate.Due to various contributing factors, the services sector is also expected to grow by 5.8 percent in 2017-18 against 6 percent during the preceding year.
According to the report, industrial sector is expected to post a growth of 7 percent during the current fiscal year against 5 percent in 2016-17 due to improvement in electricity supplies and the China-Pakistan Economic Corridor. The agriculture sector is likely to expand by 2.9 percent this year against 3.5 percent during the previous year. The current account deficit is the serious area of concern which has jumped 112 percent year-on-year in the first quarter of the fiscal year 2017-18. An increase in the foreign direct investment is expected, but lower exports and rising imports will adversely affect the foreign exchange reserves.
According to the bank, inflation is expected to reach 6 percent during the current fiscal year while fiscal deficit will widen next year due to low tax collections. The growing economic woes in the Gulf nations and Saudi Arabia are expected to subdue flow of remittances in the country. However, depending on foreign assistance and grants is not a good policy for the future of the country’s economy. The bank has rightly pointed out that reforms and macroeconomic stability are the key areas the government should focus on. The government will have to put its own house in order before seeking foreign assistances.
