Despite subsiding political impasse, growth in Pakistan is expected to decelerate due to the persistent energy crisis and troubled security situation, which would result in missing the annual national output target of 5.1%, says a new report of the World Bank (WB).
The Global Economic Prospect report states that the weakening support for economic reforms will also dampen the prospects of growth in Pakistan. The WB’s report partly supports the government argument that blamed that the Imran Khan led Pakistan Tahreek-e-Insaf’s relentless agitation disturbed the momentum of economic recovery.
The Washington-based lending agency stated that political tension in Pakistan seemed to be settling down, which should help improve prospects of growth. “However, the pace of this recovery should remain slow on account of persistent energy shortages and a troubled security situation”, it adds.
The WB’s assessment of lower growth is in line with the evaluation of Finance Minister Ishaq Dar. In his latest interaction with media, Dar had stated that due to the prevailing security situation, Gross Domestic Product (GDP) growth rate may not be achieved. But he appeared optimistic and said that the rate will be closer to the annual target of 5.1%.
The only difference between the WB analysis and Dar’s reasoning was that the finance minister was attributing the losses in national output to the military offensive against terrorists and its consequential implications on growth. But the WB termed energy shortages equally damaging for the growth.
The WB has projected that in fiscal year 2014-15, the growth rate could be around 4.7%. According to another report, Economic and Social Survey of Asia and Pacific of the UNESCAP, Pakistan’s macroeconomic fundamentals remain fragile due to poor security conditions, political instability and low fixed investment constrained by a shortage of domestic savings.
