WASHINGTON - The World Bank has acknowledged Pakistan’s promising economic progress achieved in the current financial year. A World Bank report on South Asia’s Economic Opportunity says reemergence of GDP growth of 4.1 per cent is the highest in seven years.  As for the question whether recent political turmoil had damaged investor confidence and thereby weakened growth prospects, the report said, it is still too early to assess the impact of events this year but an early estimate suggests short-term losses equivalent to 2.1 per cent of Gross Domestic Product. Economic growth is forecast at 4.4 per cent in FY2015 after 4.1 per cent this year.

The Bank says dynamic services and manufacturing sectors supported by better energy availability and improved investor expectations were the primary drivers. The report assesses that this success stemmed mainly from strong remittance and significant foreign capital inflows, which also brought stability in the foreign exchange market.

The report said strong fiscal consolidation was achieved and the fiscal deficit was contained.

Besides improved business confidence brought a strong recovery in credit to the private sector and structural reform agenda made promising progress.

The government reduced power subsidies by adjusting power tariffs toward cost recovery levels.