The World Bank says that Pakistan’s growth rate will be 2.4 percent in the next two years. According to the details, the World Bank predicts Pakistan’s economic growth targets for the next two years.
Imran Khan’s government cannot meet the targets of inflation, public debt and fiscal deficit reduction, says World Bank. In the report is it is further said that inflation is expected to increase in fiscal year 2020 to 13pc but it will start declining afterwards. The increase in prices will be driven by the second-round impact of exchange rate pass-through to domestic prices.
Economic policies over the past few years have resulted in increased debt levels and an erosion of fiscal and external buffers, affecting the economy’s ability to absorb shocks. The country needs to restore these buffers, especially because turbulence in global financial markets could affect the country’s access to private external financing. And the weakening global economy and rising trade tensions could dampen external demand.
The report said the country’s commercial banks would remain well-capitalized. However, increasing public sector demand for credit, mainly federal government borrowing, and rising interest rates were expected to crowd out private credit in the near-term.
The current account deficit was expected to decline to 2.6pc of GDP in fiscal year 2020 and further to 2.2pc in fiscal year 2021, as increased exchange-rate flexibility would support a modest recovery in exports and rationalization of imports.
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