The World Bank has kept its forecast for GDP growth this year unchanged at 3.5 percent, but says a failure to implement reforms as promised to international financial institutions could slow growth by dampening investor confidence.
"Reforms in land markets, the financial sector, anti-corruption, and privatization would not only address medium-term growth bottlenecks, but also provide an important immediate signal to strengthen investor confidence," it said in a statement.
If "reforms do not progress and the International Monetary Fund reviews are not completed, growth could fall below 2 percent in 2018 and 2019," it said.
Slow reform progress has held up funding under a $17.5 billion loan programme from the IMF and also from the World Bank, and there is a shrinking window to implement policy changes before parliamentary and presidential elections in 2019.
"Continued weak economic growth of 2 percent or less going into the elections could undermine political and social stability, which would result in a further decline in investor confidence and growth," the World Bank said.
Stubbornly high consumer price growth is a continuing risk to the economy and the bank has amended its inflation forecast for end-2018 to up to 10 percent from 7 percent, World Bank economist Anastasia Golovach said at a briefing.