KARACHI: The World Bank predicts that Pakistan’s GDP would increase by 2% in 2023, down from 6% in 2018, the final year of the coalition government led by Imran Khan.
The World Bank recently issued its Global Economic Prospect Report, which predicts that owing to devastating floods and a slowdown in global development, Pakistan’s GDP would grow by only 2% this year, down two percentage points from its June 2022 projection.
According to the World Bank, not only is Pakistan’s economic output declining on its own, but it is also reducing regional growth. It forecasted that Pakistan’s GDP growth rate would rise to 3.2 percent in 2024, which would be lower than the previous forecast of 4.2 percent.
According to the report, Sri Lanka is in upheaval, while Pakistan is facing severe economic issues. Living standard growth during the next six years are expected to be fewer than those from 2010 to 2019.
According to the World Bank, disastrous floods in August exacerbated Pakistan’s already precarious economic condition, which includes low foreign currency reserves and severe fiscal and current account deficits. Almost 15% of the population was directly affected, and infrastructure was devastated throughout almost one-third of the country’s land area (Benhassine et al. 2022; World Bank 2022p).
The recovery and reconstruction needs are expected to be 1.6 times the national development budget for FY2022/23 (Government of Pakistan et al. 2022). Flooding is likely to be to responsible for significant damage to agricultural output, which contributes for 23% of GDP and 37% of employment, as well as the poverty of 5.8 to 9 million people, due to the interruption of the current and upcoming planting seasons (World Bank 2022p). Policy uncertainty complicates the economic outlook even further.