The World Bank on Thursday urged Pakistan to take rapid action to avert an economic crisis as Yusuf Raza Gilani, the newly elected prime minister, consulted with his advisers to prepare a package of economic incentives for poorer Pakistanis hit by the fallout from increases in oil and food prices.

“There is not yet a crisis, but the economic picture for Pakistan is not good,” said Praful Patel, World Bank vice-president for south Asia, at the end of a visit to Pakistan.

“There is a good economic foundation but the growth can only continue if Pakistan adjusts to the new global reality, which includes high prices for oil, commodities and foodstuffs”.

In a related development, Pakistan’s central bank reported a big rise in the current account deficit for the first eight months of the July-June financial year to U$8.42bn, up from U$5.85bn in the same period last year.

The current account deficit was already significantly higher than the target of 4.8 per cent of gross domestic product for the full financial year.

A senior leader from the Pakistan People’s Party – the party leading the new ruling coalition – said the prime minister was likely to announce fresh incentives for lower income households in a speech on Saturday.

“Our prime minister wants to begin tackling some of these issues quickly. His first attempt to address some of these economic issues may be on Saturday,” said Naveed Qamar, a senior PPP leader and former finance minister.

Analysts warned the future of the economy could be critical to the new government’s political future. Pakistan has also received warnings of growing electricity shortages this summer.

“The power cuts [on Thursday] may be up to a couple of hours in many cities. But come summer, we expect much longer power cuts,” said a senior official at the Water And Power Distribution Authority, the main state run power distribution company.