ISLAMABAD – With growth prospects continuing to improve and inflation remaining contained, the Pakistani economy would continue to grow at 5.2 percent in 2017, the World Bank (WB) predicted in its recent report.
In its report, the Bank said that China-Pakistan Economic Corridor has supported construction activity, which is expected to stimulate industrial sector growth.
It said that these projects should help accelerate growth in the domestic construction industry and increase electricity generation, adding that sustainable and inclusive growth and poverty reduction will require greater private sector investment and longer-term development of infrastructure.
“In Pakistan, economic activity expanded by 4.7 percent in 2016 and is expected to continue to grow at 5.2 percent in 2017,” said WB’s twice-a-year South Asia Economic Focus report.
The report also cautioned that the upcoming national elections may change Pakistan’s economic policies, which in return could put the upward growth trajectory at risk.
“The upcoming national election in 2018 may affect reform momentum and macroeconomic policy orientation (of Pakistan),” the report cautioned.
According to the report, possible protectionism in advanced economies should not deter export-oriented growth in South Asia – a region that could even benefit from the backlash against globalisation.
“Simulations on the impact of hypothetical new trade barriers show that South Asia is not only resilient to a potential rise in protectionism but could possibly even gain from it in some circumstances,” said Annette Dixon, the World Bank South Asia Region Vice President.