THE IMF has slightly marked down its previous growth forecast for Pakistan`s economy from 3.2pc to 3pc for the current fiscal year, underscoring the fragility of the recent stability. Though it has not elaborated on the reasons for the downgrade, its concerns over the erosion of the economy`s capacity to support growth are unmistakable. This also shows that the economy is caught up in a low-growth equilibrium in the absence of any significant domestic or foreign stimulus.

Almost every international agency expects growth prospects for Pakistan to remain subdued for the next few years. International developments too are adding to risks to growth, even though the forecast for the global economy remains unchanged at 3.3pc in the IMF`s latest six-monthly World Economic Outlook Update. For example, the ongoing slowdown in the eurozone, a major export market for Pakistani goods, is likely to keep our industrial output suppressed. Moreover, the threat by the incoming US president to impose additional tariffs on imports from China, the EU and the rest of the world, has further deepened uncertainty for the global economy, including Pakistan`s.

Economic stability without growth should be worrisome for the ruling PML-N, which has recently devised its five-year `homegrown` economic development programme, Uraan, promising to boost growth to 6pc by the end of its term. But is it worried enough to undertake critical reforms to address the imbalances that always lead us back to the door of the IMF for bailouts and to end our growth drought? Not really. True, the signs of recent macroeconomic stability are encouraging. But that is not enough as any attempt to push the growth accelerator without first implementing structural economic changes will again propel us towards a balance-of-payments crisis. There is a reason why no private foreign investment is coming to Pakistan in spite of promises of billions of dollars from the wealthy Gulf nations. This basically underlines a lack of investor confidence in the country`s commitment to reform itself. Besides, the resurgence of militant violence in KP and Balochistan, and unresolved political divisions in the country are keeping investors away. Without heavy private investment in the economy, a growth rate greater than 3pc to 4pc will remain elusive. We are no longer in a position to pull off higher growth rates by encouraging imported consumption with borrowed money.