The World Bank. - File Photo.

ISLAMABAD, Dec 24: The World Bank Executive Board has extended the Country Partnership Strategy (CPS) for Pakistan for another year stating that economic, political and security challenges have validated the urgent need to extend the programme till June 2014.

The bank’s progress report of ‘Pakistan Country Partnership Strategy’ (2010-13) points out that the unprecedented floods in 2010 and 2011, coupled with continuing security issues and slow economic reform, as well as increased devolution of responsibilities to the provinces, posed critical challenges, which required an adjustment to the bank’s programme involving an emergency response to floods and a deepened engagement with the provinces.Shifting the focus and resources in response to the floods led to a delay in infrastructure investments. In addition, the scheduled policy lending could not materialise, though the bank remained engaged in key economic issues such as revenue mobilisation and power reforms through non-lending technical assistance, it says.

The partnership remains centred on the existing strategic pillars of the CPS economic governance, human development and social protection, infrastructure, and security and conflict risk reduction. In consultation with the government, the CPS period would be extended to include fiscal year 2014.

This will better synchronise the CPS both with the national political cycle and the IDA cycle, and will also allow time to move the agreed strategy forward following the adjustments made in the CPS period, the report says.

The World Bank report painted an uncertain outlook for the remaining CPS period but projected a gradual recovery of growth rates. Given the continuing difficult environment, growth is expected to only gradually recover to moderate rates in the near term.

The real GDP is projected to expand by 3.9 per cent in 2011-12 and by 4.2 per cent in 2012-13 period.