Wednesday, 24 July 2024
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AsiaEconomy

World Bank: Pakistan’s economic growth may not exceed 3% for the next two years

  • Pakistan’s economic growth will pick up from the current fiscal year but stay below 3% for the next two years.
  • Growth in the current fiscal year is 1.8%.
  • Prime Minister Shehbaz Sharif is requesting a fresh loan from the IMF.

The World Bank projects that Pakistan‘s economic growth will pick up from the current fiscal year but stay below 3% for the next two years.

Growth in the current fiscal year is 1.8%; if fiscal consolidation and a new IMF bailout program are put into place, that growth may increase to 2.3% in the next year and 2.7% in 2026.

Pakistan’s economic growth

In the second fiscal quarter, Pakistan’s economic development has slowed down because of the impact of historically high-interest rates on corporate operations.

Although the nation in South Asia avoided a sovereign crisis last year, its economy is still insecure. According to the World Bank, growth is predicted to continue subdued because of low investment, ongoing external imbalances, distortionary fiscal policies, and a significant state role in the economy. Policy barriers to sustainable economic growth are still ignored.

To boost Pakistan’s foreign exchange reserves and assist the country’s economy,Prime Minister Shehbaz Sharif is requesting a fresh loan from the IMF.

With $24 billion in external finance needs for the fiscal year beginning in July, the country is still highly dependent on IMF funding. In the current fiscal year, inflation is predicted to average 26%; it will then decline to 15% in the following year and 11.5% in the year 2026.

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