Islamabad, Jan 10 (IANS) The World Bank has slightly lowered Pakistans growth rate projections for the current fiscal year and next two years owing to continuation of tight monetary policy and fiscal consolidation coupled with external factors.
In its latest report “2020 Global Economic Prospects” released on Wednesday, the World Bank forecast Pakistan”s current year growth rate at 2.4 per cent — about 0.3 per cent lower than its estimates of June 2019 — before touching 3 per cent next fiscal year and 3.9 per cent in FY 2022, the Dawn reported on Thursday.
“Pakistan”s growth is expected to rise to 3 per cent in the next fiscal year after bottoming out at 2.4 per cent in FY2019-20, which ends June 30,” the World Bank said, adding that macroeconomic adjustment in the country including a continuation of tight monetary policy and fiscal consolidation is expected to continue.
The lower growth rate forecast is generally in line with a similar (0.2 per cent) decline in global growth rate during the current year and 1.5 per cent decline in the South Asian region.
Key risks to the regional outlook include a sharper-than-expected slowdown in major economies, a re-escalation of regional geopolitical tensions, and a setback in reforms to address impaired balance sheets in the financial and corporate sectors.
South Asian growth is estimated to have decelerated to 4.9 per cent in 2019, substantially weaker than 7.1 per cent in the previous year.
The regional deceleration was pronounced in the two largest economies — India and Pakistan.
Weak confidence, liquidity issues in the financial sector in India, and monetary tightening in Pakistan caused a sharp slowdown in fixed investment and a considerable softening in private consumption.