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‘Energy crisis to be biggest challenge for next govt

The energy crisis will be the biggest challenge for the upcoming government as it has affected the country’s economic growth quite adversely, said Yaseen Anwar, governor of the State Bank of Pakistan (SBP).

“Currently, Pakistan’s GDP growth is three percent against the potential of six to seven percent. The energy crisis is eating out at least three percent growth,” he said.

The increased flow of credit to private businesses, appearing due to lowered interest rates, was not sufficient to have a sustainable investment-led growth in the economy, he said.

“With contracting private fixed investment expenditures and a fragile global economy, the GDP growth in the country will be essentially consumption-led and is expected to remain just below four percent in FY13,” said Anwar.

The fundamental reasons for this likely outcome are the prolonged and severe crisis in the energy sector and worsening law and order situation in the country.

These constraints are not only causing substantial under-utilisation of the installed productive capacity but also discouraging potential private sector investment, he added.

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