Asian Development Bank (ADB) President Takehiko Nakao warned Wednesday the ongoing political impasse could damage Pakistan's recently stabilised economy, as Finance Minister Senator Ishaq Dar said the government would miss its growth target due to recent floods.
Speaking at a joint press conference, Nakao and Dar praised the government of Prime Minister Nawaz Sharif for improving the macro-economic outlook and pursuing a liberalisation agenda.
“Today we are seeing the growth rate is picking up, the inflation rate is becoming more managed, and foreign reserve (has picked up) – and the exchange rate is becoming stabilised so it is really a remarkable achievement by the government,” said Nakao.
“What is important is the... continuation of democracy. I am so glad to see the peaceful and democratic transition of government last year,” he continued.
Last year's general election was the first time a civilian government handed over power to another in a country that has been ruled for more than half its existence by the dominating army.
But protesters led by Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan and Pakistan Awami Tehreek (PAT) chief Dr Tahirul Qadri have camped outside parliament for more than a month demanding Sharif resign, alleging he rigged the poll, which local and foreign observers rated as credible.
Pakistan's government has said the crisis has cost the exchequer billions of rupees (millions of dollars) and deterred foreign investment after ratings agency Moody's upgraded the country's outlook from negative to stable.
Nakao said: “It's a very difficult to tell what should be the impact of this political impasse. We don't have any estimate about it. If it prolongs there is more damage and if it is solved quickly the damage will be more managed.”
Nakao added that the bank, which is set to provide $5 billion to Pakistan over the next five years in assistance particularly in energy and infrastructure sector, would extend flood relief to the country after an assessment report was completed.
At least 296 people have died in this year’s flooding, which has also damaged 2.2 million acres of farmland in the breadbasket Punjab.
Dar said the damage would affect Pakistan's growth target of five per cent for the fiscal. “It will have a bearing on our GDP, we have a major agricultural loss in Punjab. We have budgeted for and projected (growth) at five per cent,” he said.
