The World Bank downgraded Pakistan’s growth forecasts from 2 percent to 0.4 percent for the current fiscal year, predicting challenging times ahead and citing tighter financial conditions and constrained fiscal space as the main causes.
The bank projected uninspiring economic growth with an average inflation rate of 29.5 percent for the current fiscal year in its report, Pakistan Development Update, which forewarned the South Asian nation about major threats to its economic and debt viability.
According to the international financial organisation, the number of individuals living in poverty will likely rise to 37.2 percent in the current fiscal year, displacing about 4 million people from the previous fiscal year. WB connected rising food costs to worsening food insecurity in Pakistan, where a bigger percentage of income is spent on food.
It argued that carrying out the structural and macroeconomic reforms outlined in the IMF programme is essential to regaining confidence and macro-stability as well as preventing a public debt crisis.
Najy Benhassine, the director of the World Bank in Pakistan, stated that the IMF programme provides an anchor for keeping reforms on track in the current environment and noted that it was not an easy moment to write the Pakistan Development Update report.
Due to the nation’s loss of access to international capital markets as a result of the crisis, it is now challenging to get even more loans to renew the IMF bailout money. With a severe balance of payments issue, the nation of nearly 220 million people is experiencing its greatest economic crisis in months. crisis as talks with a foreign lender have been in doubt since last year.
On other hand, World Bank also lowered its 2023 regional growth forecast to 5.6 percent from 6.1 percent. It lowered its forecast for India’s economic growth.
