| GEO Business|
| WB to lend $2 bln to Pakistan in 2009|
| Updated at: 2154 PST, Saturday, February 07, 2009|
ISLAMABAD: The World Bank plans to lend Pakistan $2 billion this year, the bank said in a statement on Saturday, as the South Asian country struggles to combat inflation and prop up sagging economic growth.
"The bank plans to provide up to $2 billion in credits during this fiscal year to support economic growth and the government's poverty-focussed programmes," the statement quoted the country's director for Pakistan, Yusupha Crookes, as saying.
The statement came at the end of an official visit to Pakistan by the bank's Managing Director, Ngozi Okonjo-Iweala, who praised the government's efforts to correct macroeconomic imbalances.
"Pakistan is now moving in the right direction," Okonjo-Iweala said.
After years of healthy growth, Pakistan's economy was hit by surging oil and food prices in 2008, while investment dried up because of political uncertainty and security challenges posed by Islamist militancy.
The State Bank of Pakistan is expecting about 3.7 percent gross domestic product (GDP) growth in the 2008/09 fiscal year to June 30, down from 5.8 percent in the previous year.
Pakistan is also faced with the worst inflationary pressure since the 1970s. The consumer price index rose 23.34 percent year-on-year in December.
The International Monetary Fund approved a $7.6 billion package for Pakistan in November to help it avert a balance-of-payment crisis and support its dwindling foreign exchange reserves.
Pakistan has also been trying to drum up support from other donors and international lending agencies to expand its social safety net and boost development spending.