Pakistan Long-Term Growth Capped by Weak Democracy, Geopolitics

Pakistan’s economic growth is set to rise gradually in the long run, though the nation’s inability to tackle deeper structural issues like corruption and reduced geopolitical relevance could limit the upside, according to Bloomberg Economics.

The potential growth rate — the pace at which an economy can advance without fueling any additional inflation pressure — is set to peak at 4% in the financial year through 2040, South Asia Economist Ankur Shukla wrote in a report on Thursday. That’s higher than the 3.2% potential growth in the last fiscal year but below the pace achieved in the mid-2000s.