The World Bank on Monday predicted that Pakistan’s economy will grow by 5.2% in the current fiscal year, which is phenomenal. However, the upcoming general elections in the country may affect the economic growth trajectory.
According to the World Bank’s biannual South Asia Economic Focus Report 2017, “the upcoming national election in 2018 may affect reform momentum and macroeconomic policy orientation (of Pakistan).” The report also identified various risks associated with the projected positive outlook for Pakistan.
Analysts believe that the current administration has introduced business friendly policies and economic growth is the result of such policies. The country will go to the polls in the middle of next fiscal year and a change in administration will produce negative results on the economy.
Apart from political risks, the World Bank has also highlighted that slow progress on the much needed structural reforms is another major risk, which may affect the projected economic growth.
It is important to mention that the Asian Development Bank (ADB) and the International Monetary Fund (IMF) also reported that Pakistan’s economy will grow, if risks associated with it are mitigated.
“Pakistan for the first time will achieve more than 5% GDP growth in the last 10 years, which is expected to remain between 5.2% and 5.5%,” said Ahsan Iqbal, Minister of Planning, Development and Reform. The government has set the growth target at 5.7%, he added. Experts believe that the reports of the international organizations have identified some risks, which the country needs to minimize in order to improve the economy and achieve the growth target.
The World Bank also predicted that Pakistan will experience 3.4% growth in the agriculture sector and 6.1% in the industrial sector.