ISLAMABAD: The World Bank predicted Pakistan’s economic growth to slow further to 2% during the current year. The new forecast of the World Bank about economic growth of Pakistan is lower by two percentage points from its earlier estimate of June 2022.
The World Bank said that the devastating floods and slowdown in global growth rate would further slowdown economic growth in Pakistan.
The WB has predicted this in its publication, Global Economic Prospects, released on Tuesday.
In the report, the World Bank said Pakistan’s economic growth was not only decreasing itself but also reducing the regional growth rate.
The World Bank, nonetheless, estimated that Pakistan’s GDP growth rate would improve to 3.2pc in 2024, slightly lower than the previous estimate of 4.2pc growth.
About one-third of the country’s land area was affected, damaging infrastructure, and directly affecting about 15pc of the population.
“Recovery and reconstruction needs to be 1.6 times of the FY23 national development budget,” it said. Flooding is likely to seriously damage agricultural production — which accounts for 23pc of GDP and 37pc of employment.
Pakistan has recorded 14pc depreciation in its currency from June to December 2022 with increase in its country risk premium by 15 percentage points over the same period.
“Policy uncertainty further complicates the economic outlook” of Pakistan, in addition to flood damages and the resultant increase in poverty, the bank said.
The report explained that an already precarious economic situation in Pakistan, with low foreign exchange reserves and large fiscal and current account deficits, was exacerbated in August last year by severe flooding.
According to the World Bank, the global growth will remain pegged to 1.7pc this year, as against 3% estimate of June.
The report said that global growth was slowing further because of a high inflation, higher markup rates, reduced investment, and disruptions created by Russia’s invasion of Ukraine.
I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.
