High lending rates, inflation weigh growth outlook down

The World Bank on Wednesday projected Pakistan’s economic outlook to remain subdued during the current fiscal year and slightly recover next year amid prolonged global economic challenges. “In Pakistan, the economic outlook for FY24 remains subdued, with growth projected at only 1.7pc. Monetary policy is expected to remain tight to contain inflation, while fiscal policy is also set to be contractionary, reflecting pressures from high debt-service payments”, said the World Bank in its latest publication Global Economic Prospects — January 2024” released on Wednesday. The bank said that weak confidence in Pakistan stemming from political turmoil will contribute to the slow growth in private demand. “As inflationary pressure eases, growth is expected to pick up to 2.4pc in FY25”, it added.