The World Bank released a report in which it said this was the result of fiscal and monetary policies being tightened to address macroeconomic imbalances. Domestic demand is expected to contract while at the same time export growth will be gradual, stated the report, adding that the agriculture and industrial sectors will grow less in these fiscal years. According to the World Bank, the trade deficit is projected to remain high in 2019 but will narrow in the 2020 2021 fiscal years as the impacts of currency depreciation and other regulatory measures to curb imports set in.
Growth is expected to recover to 4% in the 2021 fiscal year as structural reforms take effect and macroeconomic conditions improve.
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| Illango Patchamuthu, WB, Country Director Pakistan. |
Remittances flows are likely to support the current account balance next year, according to the report. A more stable external environment will also support a pickup in economic activity starting from 2021.
Pakistan’s growth must be driven by investment and productivity, said Illango Patchamuthu, the World Bank’s Country Director for Pakistan.
The report noted that it is “entirely possible for Pakistan to transform its regulatory environment and reduce the cost of doing business”.
But it said that reforms to improve tax administration and widen the tax base are critical on the revenue front.
Over the adjustment period and beyond, actions outlined in the recently announced Ehsaas Program can protect the poor and vulnerable through social safety nets and safeguarding public spending on health and education, it added. (www.samaa.tv)
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