Islamabad: Pakistan’s economy is expected to grow by 3.4 per cent in the current fiscal year, benefiting from structural reforms and increasing export competitiveness, the World Bank has forecast.

Cash-strapped Pakistan recorded growth last year, surprising experts. Improved domestic demand, record-high remittance inflows, a narrow targeting of COVID-19 lockdowns, and accommodative monetary policy were responsible for it, the World Bank said on Wednesday in its Global Economic Prospects report, 2022.

While the Pakistani economy will grow by 3.4 per cent in the current fiscal, it will grow at 4 per cent in 2022-23 — benefiting from sustained structural reforms, increasing export competitiveness and improved financial viability of the power sector, the Dawn newspaper quoted the World Bank as saying.

The report points out that real interest rates in Pakistan dropped precipitously during 2020 and remained negative through 2021.

The report notes that Pakistan saw its goods trade deficit widen to record levels on strong domestic demand and rising energy prices.

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