It is true, as observed by the World Bank country director, that Pakistan will need to continue with its economic reforms and pursue policies that make the country compete better in global markets. Some decent growth is expected in the industrial and services sectors but the agriculture sector is likely to remain in a rut.
Current account imbalances are wide enough to become unsustainable in the absence of timely corrective policy measures. It is estimated to fall to 4pc of GDP in 2017-18 against 4.1pc in the last fiscal year. It is possible that FDI may rise owing largely to CPEC but capital and financial flows are not just not expected to finance the current account deficit. Inflation is likely to grow to six per cent. Pakistan, according to the World Bank’s projections, will miss all key macro-indicators targets set for this fiscal year, notably fiscal deficit, current account deficit and annual economic growth rate. What is needed is an appropriate policy response that corrects imbalances and increases buffers strong enough to absorb future shocks, reduce risks and support growth.
Published in The Express Tribune, November 11th, 2017.
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