Islamabad April 2 2024: Pakistan is expected to continue facing foreign exchange liquidity issues due to the persistent trade deficit and limited access to external financing, says World Bank in its report.
Even with the recent successful completion of the IMF-SBA and continued rollovers, reserves are projected to remain low. Import management measures are expected to continue disrupting domestic supply chains, while tight macroeconomic policies will mute aggregate consumption and investment.
In the absence of a credible and ambitious economic reform agenda, uncertainty is expected to linger, affecting confidence and growth.
Economic activity is therefore expected to remain subdued with real GDP projected to grow at 1.8 percent in FY24. As confidence improves, output growth is expected to recover to an average of 2.5 percent over FY25 and FY26, remaining below potential in the medium term.
