Islamabad (Web Desk): The World Bank raised its growth forecast for Pakistan for the current year ending in June, to 4.3% from 3.4% and kept next year’s growth outlook unchanged at 4%.
The WB, in a report launched on Wednesday, warned that the external debt repayment to exports and remittances in South Asia is the highest in Pakistan and Sri Lanka.
“Indicators of ability to pay, such as the ratio of public external debt service to exports and remittances, is highest in Pakistan and Sri Lanka," the WB’s report titled The South Asia Economic Focus, Reshaping Norms: A New Way Forward stated.
The report said that the situation is even worse in Sri Lanka, where market-based refinancing is prevented by a series of sovereign credit rating downgrades as a result of heightened fiscal and external risks.
WB Chief Economist for South Asia Hans Timmer, while addressing an online press briefing, said that Pakistan needs to cut down its huge budget and current account deficits in order to achieve consolidation of the economy.
Pakistan’s debt repayment capacity is not vulnerable but medium to long-term, Islamabad would have to narrow down its twin deficits, Timmer added.
The WB’s report states that in Pakistan, GDP growth is expected to slow to 4.3% in FY2021/22 (ending June 2022) and to 4.0% in FY2022/23.