KARACHI: Pakistan said on Friday the World Bank growth estimates for fiscal years 2021 and 2022 were based on “unrealistic assessment,” adding that the country’s economy grew by 3.94 percent and would soon be hovering around five percent.

The global lending agency on Thursday issued a report on South Asian economies that said Pakistan’s growth rate remained 3.5 percent in FY21.

It informed the country’s Gross Domestic Product was estimated to have increased by 3.5 percent in FY20-21, an upward revision of 2.2 percentage compared to the last forecast.

The report also added the country’s overall GDP growth was expected to ease to 3.4 percent in the current fiscal year since both expansionary fiscal and monetary measures were “expected to unwind.”

Reacting to the publication, however, Pakistan’s finance division said the World Bank estimates were inaccurate.

“With regard to the World Bank’s growth estimates of 3.5 percent in FY2021 against the National Accounts Committee’s estimates of 3.94 percent, released by the PBS [Pakistan Bureau of Statistics], it is mentioned that the WB estimates are based on unrealistic assessment,” said a comprehensive official statement.

The provisional estimate of GDP growth for FY2021 was 3.94 percent, it added, which was based on 2.8 percent growth in agriculture, 3.6 percent in Industry and 4.4 percent in services.

The statement said largescale manufacturing (LSM) was provisionally taken as 9.3 percent that yielded the estimated growth of 3.94 percent.

The LSM data was available with a lag of two months, the finance division explained, adding that the recent data released by the Pakistan Bureau of Statistics recorded a growth of 15.2 percent for FY 2021.

“After incorporating the latest available information, the GDP growth in FY2021 will improve further above 3.94 percent as compared to 3.5 percent estimates by the World Bank,” the statement continued.

It maintained the country’s economy was expected to grow by about five percent against the World Bank projection of 3.4 percent.

“For FY2022, the WB projection of 3.4 percent for GDP growth is again underestimated,” the statement said. “It is pertinent to mention that the economy of Pakistan has shown V-shaped recovery in FY2021 without creating any external and internal imbalances.”

“The government is committed to ensure that the growth momentum remains intact with macroeconomic stability,” it added. “Thus, it is expected that GDP growth for FY2022 will remain close to 5 percent.”

It did not say anything about the growth forecast for the next fiscal year (FY23) which the World Bank said would reach about four percent.

“For FY22/23, growth will pick up again to reach 4 percent as major structural reforms are implemented that are expected to strengthen the economy’s overall competitiveness,” said the World Bank report.

The WB report analyzed that fiscal and monetary tightening were expected to resume in FY22, as the government refocused on mitigating emerging external pressures and managing longstanding fiscal challenges.

“Regarding the monetary and fiscal tightening,” the finance division said, “it is to mention that, on one hand the government is tightening monetary and fiscal policies to contain the demand pressures, while on the other it is encouraging growth supporting policies as mentioned above.”

The statement also responded to the World Bank report on inflation and pressure on external accounts.

The bank had noted in its report that public debt would remain elevated in the medium term along with the country’s exposure to debt-related shocks.

It added that its economic outlook in the report had assumed that the Pakistan’s bailout package from the International Monetary Fund would continue to remain on track.

The finance division said, however, it expected that Pakistan would “achieve growth target with price stability.”