National News

ISLAMABAD, (APP): Pakistan’s fast-growing remittances,
rising investments under the China Pakistan Economic Corridor (CPEC)
have supported economic growth of the country, World Bank’s latest
report said.
According to Banks latest report Pakistan’s modest economic
recovery would continue.
However, growth remains well below the 5.5 percent target
envisaged in Pakistan’s Annual Plan and the South Asia average of
7.5 percent, the Banks report on Pakistan said.
Pakistan growth, the bank said is expected to pick up to 4.5
percent from 4.2 percent.
Like the rest of the region, Pakistan is benefitting supported
by low oil prices, high remittances and CPEC investment from low oil
prices, which have reduced the trade deficit (in spite of a notable
decline in exports) and increased consumption, the bank report said.
The World Bank was of the view that structural challenges
prevent Pakistan from growing as quickly as its neighbors.
The effects of the high remittances and low oil price windfall
(driving such high growth rates in the rest of South Asia) are
somewhat hampered in Pakistan by its continuing domestic structural
challenges.
The bank said the government is making progress on the
structural reforms that will be essential to safeguard growth.
It further said that the government has made great strides in
increasing foreign reserves and has recently made progress in power
sector and revenue reforms but its ambitious reform agenda is
necessarily a medium- to long- term plan.
Given the risks presented by the current global economic
situation, these reforms will be necessary to safeguard Pakistan’s
growth, the Bank said.
In particular, the bank report observed that while low oil
prices boosted consumption and reduced the import bill, sustained
cheap oil may reduce public investment in GCC countries, ultimately
lowering Pakistan’s remittance receipts.
Private sector loans for long-term investment have increased
substantially compared with the corresponding period in the
previous year.
However, while national savings tend to be the most reliable
source of funds for investment, Pakistan’s historical rate of
savings has been very low.
National savings were 10 percent of GDP in the 1960s,
increasing to 15 percent in the 2000s but remaining below that level
ever since.
The government’s Annual Plan has identified a savings rate
target of 16.8 percent rate.