KARACHI: The World Bank expressed concern on Thursday that Pakistan's growing fiscal and external imbalances were threatening hard-earned gains in economic growth and stability.
A biannual report issued by the bank said Pakistan's economic growth had accelerated to 5.3 percent in the 2017 financial year - the highest in a decade - and was projected to touch 5.8 percent in the 2019 financial year.
But as growth had picked up, it said, internal and external imbalances had re-emerged and the fiscal deficit had expanded, with revenue mobilisation weakening and spending rising. The current account deficit had reached highest in a decade.
"Pakistan has made good progress in making its economy more stable in recent years," said the World Bank's country director for Pakistan, Illango Patchamuthu.
"In order to sustain this hard-won achievement, Pakistan will need to continue with economic reforms and pursue policies that make the country compete better in global markets."
With 2 million people joining the labour force every year, encouraging entrepreneurship will be important to meet the challenge of creating jobs, increasing productivity and creating economic opportunities, especially for women, the report said.
The report said foreign direct investment had increased during as a result of Chinese involvement. Beijing has committed $57 billion to build road and rail infrastructure and enhance energy production in Pakistan as part of its "One Belt, One Road" plan.
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