Daily Times

The World Bank downgraded Pakistan’s growth forecasts from 2 percent to 0.4 percent for the current fiscal year, predicting difficult 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 serious threats to its economic and debt viability.

According to the international financial institution, the number of people 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 larger 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 is an anchor for keeping reforms on track in the current environment and added that it was not an easy time 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 secure even more loans to renew the IMF bailout funds. Over 220 million people live in the nation, which is currently experiencing its worst economic crisis in months and a severe balance of payments crisis as a result of shaky progress in negotiations with a major lender since last year.

On the other hand, the World Bank also cut its prediction for regional growth in 2023 from 6.1 percent to 5.6 percent. It downgraded its prediction for India’s economic expansion.