Pakistan’s Gross Domestic Product (GDP) growth is expected to rise to a nine-year high in the current fiscal year and the growth rate will continue to surge in the coming financial years, the World Bank said in a report issued on Saturday.
“The GDP growth in the fiscal year (FY) 2017 is expected to climb to 5.2 per cent and the growth rate will continue to accelerate, reaching 5.5 per cent in FY18 and 5.8 per cent in FY19,” predicted the report launched in collaboration with the Lahore School of Economics.
The Pakistan Development Update, released biannually, sets out recent developments across the economy and identifies risks and opportunities in the near future before focusing on a handful of key development challenges.
“Pakistan’s accelerating growth is good news and reflects the country’s success in building confidence. But the pace of reforms has slowed and it is important for the structural reforms to accelerate,” a press statement quoted Illango Patchamuthu, the World Bank country director for Pakistan, as saying.
According to the report, the country’s growth will continue to benefit from growing consumer and investor confidence in the first half of FY17, following the successful efforts to restore macroeconomic stability during the last four years. It further highlights that more recently, weakening trade and fiscal balances point toward the need to continue with the reform efforts to consolidate the hard won stability.
Indicating an expected moderate increase in investment to supplement growth, driven primarily by public and private consumption, it also claimed that the country’s current account deficit and fiscal balances deteriorated in the first half of the financial year, which could affect the reform momentum.
Emphasising the importance of collaboration between federal and provincial governments in delivering on the country’s reform agenda, it discussed a number of challenges that the provincial governments are facing.
“Since the 18th Constitutional Amendment, many important reform areas are now shared responsibility. Provinces have a significant role to play in fiscal consolidation, energy sector reforms and business environment, not to mention their role in delivering high quality health and education services,” said Muhammad Waheed, a World Bank senior economist for Pakistan. “Effective collaboration between federal and provincial governments will be crucial if Pakistan has to deliver on its growth potential,” he added.