AS in the recent past, the i economy will continue to muddle through 2024. Thereal economic question is whether the new power structure after the elections in February 2024 will continue with the current International Monetary Fund (IMF) standby agreement.

With a severe foreign exchange financing gap of over $20 billion per year, the choices are limited. If extended, a new IMF programme will stabilise the economy but throttle growth. If not, unless large doses of foreign direct investment materialise, the country will live under the shadow of impending default.

Re-igniting growth will remain the government`s biggest challenge, together with reigning in unprecedented high inflation.

An import-intensive export growth strategy is a nonstarter without the foreign exchange to support it. So, this leaves only the domestic market, where prudent price incentives and support measures could stimulate growth.

But continuing high interest rates essential to slow down inflation-will frustrate new investment.

The only real option is to continue under the IMF/ World Bank shadow and hope for a good wheat harvest and robust agricultural growth to stimulate manufacturing and services.

The huge undocumented informal sector has its own growth dynamics, which will keep the economy afloat. The tenacity for reforms to move towards growth with macro stability will be severely tested. •