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Asia-PacificJuly 3 2017

Can Pakistan hold its nerve and sustain economic growth?

Pakistan’s GDP growth is up, its budget deficit is down and the China-Pakistan Economic Corridor promises to bring with it major investment. But observers are warning against government complacency as its privatisation programme stalls and power debts remain unpaid. 
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There were 28 foreign leaders, mostly from developing countries, at Beijing’s Belt and Road conference in May. None had quite as much riding on China’s ambitious trade scheme as Pakistan’s prime minister, Nawaz Sharif, given that the positive outlook of Pakistan’s economy mostly flows from the China-Pakistan Economic Corridor (CPEC).

On the face of it, the broader Pakistani economy is looking healthy. Gross domestic product (GDP) growth has been improving for the past few years, making Pakistan “one of the top performers of south Asia”, in the words of the World Bank. If growth for the financial year ending in June 2017 lives up to World Bank estimates of 5.2%, up from 4.7% the previous year, it would be Pakistan's best performance for nine years.

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