ISLAMABAD, April 28, 2016 Pakistan continues its modest growth recovery.

Growth rate in
2017 is expected to rise to 4.8 percent the World Bank says.

Releasing its twice-a-year Pakistan Development Update, the World Bank applauds the
government for restoring economic stability but noted that much of the countrys economic
growth was underpinned by external influences such as low oil prices and strong remittances
while private and public investments continue to remain low.

Pakistan has made great progress in restoring macroeconomic stability but much more needs to
be done to put Pakistan on a solid, economic growth footing, said Illango Patchamuthu,
World Bank Country Director for Pakistan. Persistent, steady progress on the structural
reform agenda will be necessary if Pakistan is to accelerate its growth recovery and lift millions
more out of poverty.

The latest Pakistan Development Update sets out recent developments across the economy and
identifies risks and next steps facing Pakistans near-term future before focusing in on a handful
of key development challenges.

The report highlights that the pace of Pakistans economic growth will accelerate modestly
through to 2019. However, significant risks remain and the country should guard against global
slowdown by continuing to make key reforms, including expanding the electricity supply,
boosting tax revenues, strengthening the business environment and encouraging private sector to
invest.

The report identifies services and large-scale manufacturing as the key supply-side drivers of
growth. Services are expected to grow over 5 percent in FY2016 while large-scale
manufacturing, benefitting from low global commodity prices, is expected to grow between 4
and 4.5 percent. On the demand side, consumption is driving growth, fueled by rising
remittances and a loose monetary stance.

The report is optimistic about recent progress in fiscal consolidation, highlighting a 20 percent
growth in the revenues of Federal Board of Revenue for the first eight months of FY16. Fiscal
consolidation is one of the most significant reform challenges facing Pakistan today, said
Enrique Blanco Armas, World Bank Lead Economist for Pakistan. The federal government
has kept a tight rein on recurrent expenditure, while continuing to invest in Public Sector
Development Program expenditure, a very positive development.

Workers remittances and lower oil prices contributed most to the accumulation in foreign
reserves, according to the report. Remittances of $9.7 billion in the first half of FY16 more than
compensated for the trade deficit, and oil prices delivered a 9.1 percent fall in the import bill.
The strong balance of payments headline figures, however, mask the structural weaknesses in
Pakistans export competitiveness. Exports fell by 11.1 percent in the first half of FY16 as a
result of softer global demand and domestic bottlenecks. Port charges in Karachi, for example,
are nine times higher than those in Dubai and Singapore. Shipping container dwelling times are
three times longer than in East Asia. Exporters who want to participate in global supply chains
are hamstrung by these constraints