Pakistan’s Finance Minister Asad Umar said on Monday that the country’s economy was out of the crisis phase even as the World Bank projected a bleak picture of Pakistan’s economy with deceleration of growth rate and rising inflationary as well as debt burden over the next two years.
“The crisis phase for the economy is over, however, we are still in the stabilization phase,” Umar was quoted as saying by Geo News during an event here.
“The situation right now is that we are not taking loans to pay off past loans, but to pay off interest.”
His comments followed the World Bank’s regional update report on South Asia which was released on Sunday.
The World Bank stated that Pakistan’s public debt to GDP was expected to cross 80 per cent in FY-19 and to remain elevated in the next two years, increasing the country’s exposure to debt-related shocks.
“The pace of poverty reduction is expected to continue to slow-down in FY-19 and FY-20, following the projected growth deceleration and higher inflation rates,” the report said.
It said that Pakistan’s growth was projected to decelerate to 3.4 per cent in FY-19 and to 2.7 per cent in FY-20, as the government tightened fiscal and monetary policies.
According to the Finance Minister, Pakistan was facing three main problems on the economic front. “We are stuck with the fiscal deficit, current account deficit and saving and investment gap.”
He said long-term economic planning was the need of the hour and it was being treated as a top-most priority by the Pakistan Tehreek-e-Insaf-led government.
The Minister said Pakistan’s negotiations with the International Monetary Fund (IMF) were in the final stages.