Islamabad, Thursday 11 October 2018: World Bank has claimed that Pakistan is in grip of weak economy, the situation will remain the same for upcoming two years.

World Bank in its report under the head of ‘Pakistan Development Update’ further said deviation of the fiscal deficit from the target indicates the difficulty faced by federal government in running a credible fiscal policy if provincial governments are not legally bound to contribute to such a target.

If this issue is not resolved, prudent fiscal policy will not be possible, and Pakistan will be exposed to another cycle of fiscal slippages.

Simultaneously, the government needs to tackle other structural fiscal issues. Pakistan’s ability to raise funds from the global markets has been impacted by rising US treasury yields, and challenges faced by Turkey and Argentina which would squeeze liquidity from the emerging markets.

The report says that the policy adjustments are needed to correct macroeconomic imbalances which are likely to decelerate GDP growth to 4.8 per cent during the current fiscal year as authorities tighten fiscal policy and adjust policy levers to correct the imbalances. 02