The main findings are as follows: (1) an increase in private
national saving during 2001-03 was the key contributor to the
turnaround in Pakistan's external current account during this
period; (2) while Pakistan's growth was mainly export-led before
2003-04, it was largely led by domestic demand in 2004, especially
consumer demand but also private and public investment; and (3) the
structural reforms implemented in Pakistan during the past four
years should make the observed strengthening in domestic savings
and rise in domestic investment permanent, auguring well for
accelerated growth within a sustainable external balance. The
country's growth prospects would be further enhanced by a more
externally driven growth process, and by an acceleration of
structural reforms to further improve productivity and the
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