The World Bank has advised Pakistan to carry out economic reforms and make quick adjustments to steer clear of economic crisis. According to the bank sources, the new government should watch its steps on way to economic stability. The WB further advised the new government to carry out economic reforms and make quick adjustments to steer clear of an economic crisis.
The reminder to keep in view the economic aspect while making policies came from Praful Patel, WB vice president, at the end of his three-day visit to Pakistan. Patel's word of caution reflects his concern that Pakistan is likely to miss targets of fiscal deficit, current account deficit, inflation, and foreign exchange reserves.
Patel has observed that there is no crisis at the moment but he believes that "economic indicators of Pakistan are not a good omen for future economic picture of the country." According to Patel, the economic growth Pakistan had seen over the past few years, in addition to foreign direct investment and remittances, could be maintained only if the government adjusted to the global prices of oil and wheat.
Patel's saying that since re-adjustments in the economy would be painful "there must be an appropriate safety net for the poor" should be heeded to. This is not the first that IFIs have painted a bleak picture of Pakistan's economy in terms of achieving its economic goals.
According to thweWB and Asian Development Bank's projections, Pakistan's economy will not be able to meet its target of 7.2 percent GDP growth rate this year. The growth rate is predicted to linger around 6.5 percent in the current fiscal year owing to a number of factors.
While keeping in view the advice of the WB, the government will have to dispel the impression that Pakistan's economy mostly runs in accordance with the dictates of the WB and International Monetary Fund (IMF), resulting in an increased level of poverty.
For a start, the task before the economic policy makers at the moment is to restore investors' confidence. A smooth political process and the availability of maximum energy input to the industrial sector will give the ailing economy the required impetus.
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