Washington, April 9 (NationPress) Pakistan is currently grappling with escalating debt challenges, disappointing growth forecasts, and ongoing structural weaknesses that endanger its economic stability, according to the World Bank.

The report emphasized that nations burdened by high public debt, limited fiscal capacity, and significant external financing requirements are particularly vulnerable to global disturbances like rising energy costs and stricter financial conditions.

Pakistan, presently evaluated under a broader regional framework instead of just South Asia, fits into this group of at-risk economies, as noted in the report.

The high demand for external financing is a primary concern. Countries with substantial debt and limited reserves are susceptible to currency devaluation, increased borrowing expenses, and diminished investor trust, as highlighted by the World Bank.

Fiscal limitations continue to hinder policy responses. Insufficient tax revenues and ongoing deficits restrict the ability to manage economic shocks or foster growth, the report pointed out.

Dependency on energy imports further exacerbates the situation. Economies that rely heavily on imported fuel are particularly exposed to fluctuations in global prices, leading to widened current account deficits and higher inflation rates.

The report cautioned that global financial instability may intensify these pressures. Capital flight, reduced liquidity, and rising interest rates could impede economic activity in fragile nations.

Risks within the banking sector remain significant. Elevated levels of non-performing loans and inadequate financial buffers may hinder credit growth and investment, delaying economic recovery.

The World Bank underscored the necessity for continuous structural reforms. Enhancing fiscal governance, improving regulatory frameworks, and fostering a conducive business climate are vital for restoring stability and drawing in investments.

Global transitions in trade and technology could impose additional challenges. Sluggish demand and disruptions in export industries might restrict growth opportunities for economies already under pressure.

Pakistan has repeatedly encountered balance of payments crises in recent years, frequently requiring assistance from the International Monetary Fund. High inflation, currency fluctuations, and energy shortages have adversely affected growth.

Measures to stabilize the economy have concentrated on fiscal discipline and structural reforms; however, progress has been inconsistent, leaving the country open to external shocks.