The World Bank has warned that the Panama Papers issue has “enhanced political risks in Pakistan” and created “some policy uncertainty”, the media reported on Sunday. In its report titled ‘Pakistan Development Update’, launched on Saturday, the World Bank cautioned that the country was “exposed to natural disasters, political events and terrorism” on the domestic front, while the upcoming national elections may affect “reform momentum and macro-economic policy orientation”, Dawn online reported.
Released twice a year, the World Bank report sets out “recent developments across the economy and identifies risks and opportunities in the near-term future before focusing on a handful of key development challenges”.The bank is not the first international financial institution to warn that Panama Papers issue may have consequences for Pakistan’s growth.
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Last year, International Monetary Fund President Christine Lagarde noted that the perception of corruption in Pakistan would hurt private investment and impede efforts to promote sustainable and inclusive growth.Since the Supreme Court’s decision to form a joint investigation team to probe the assets of Prime Minister Nawaz Sharif and his family, experts are divided over whether this would yield concrete results or whether it was a mere “eyewash”.
Despite this, the bank notes that Pakistan’s economic growth is expected to climb to 5.2 per cent during the fiscal year ending in June, which is the highest in nine years, reports Dawn online.However, there are significant downside risks to the projected outlook, and the country remains vulnerable to domestic and external shocks.According to the report, the country’s growth rate will continue to accelerate, reaching 5.5 per cent in FY 2017-18 and 5.8 per cent in 2018-19.