The World Bank has warned that macroeconomic risks in Pakistan have increased substantially during the fiscal year 2017, as the external balance is particularly vulnerable given the persistent current account deficit, affecting the country's reserve position.
Pakistan's weaker macroeconomic discipline has led to vulnerabilities in the balance of payments. Since the IMF programme came to an end, external indicators of the economy have deteriorated, says 'The South Asia Economic Focus Fall 2017' released on Sunday ahead of the World Bank and IMF annual meetings.
One year ago, Pakistan was in a comfortable position, as international reserves were large enough to cover the current account deficit, the service of external debt and even the total volume of portfolio investments in the country. By now international reserves still cover the first two items, but not the third one. Addressing the sources of this increased vulnerability should be a priority, suggests the report.
Source: Dawn. com