Pakistan is South Asia’s Weakest Economy, World Bank report
Pakistan is South Asia’s Weakest Economy, World Bank report: Pakistan’s economic growth is expected to drop down even more this year, to just two percent, according to the World Bank. This will mark a drop of two percentage points from its June 2022 estimates, according to the World Bank’s Global Economic Prospects report. According to the analysis, Pakistan’s economic output was not only contracting on its own, but it was also slowing down regional growth. Forecasting Pakistan’s GDP growth rate to improve to 3.2 per cent in 2024, the report said, “Policy uncertainty further complicates the economic outlook” of Pakistan.
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This pace reflects still robust growth in India, Maldives, and Nepal, offsetting the effects of the floods in Pakistan and the economic and political crises in Afghanistan and Sri Lanka. However, the worsening global economy will have an adverse effect on investment in the area, according to the report, which also predicted a “sharp, long-lasting slowdown” with this year’s predicted global growth of 1.7%.
Devastating Floods, Biggest Reason:
Floods in Pakistan in July last year was cited as the main reason for the faltering economic situation in the country by the World Bank. The report also cited devastating floods in 2022 as a reason for the precarious economic situation in the country. Floods deluged almost one-third of Pakistan and directly impacted about 15 percent of the country’s population. “Recovery and reconstruction needs are expected to be 1.6 times the FY2022-23 national development budget,” the report said.
Cost of food items touches sky:
In Pakistan, soaring prices of basic food items have been burning hole in the pockets of people. Wheat, which is an essential staple food of Pakistanis, is barely in reach for many locals. Its prices have surged over 57 per cent, while the cost of wheat flour also saw an increase of 41 per cent, the Pakistan Bureau of Statistics said.
Pakistan’s forex reserves hit new low:
Pakistan’s forex reserves have hit a new low of USD 4.6 billion that would be barely adequate to pay for foreign bills for three weeks. The country needs aid valued at USD 33 billion, according to analysts. The shortage of dollars has been drastically hurting the economy and diverting remittances from the legal banking channel to the grey market.