Economic crisis, World Bank’s forecast of decline in Pakistan’s GDP. Pakistan’s fiscal year runs from July to June, the country’s economy is expected to grow by 2 percent this year: report
The World Bank has predicted a decrease in the gross domestic product (GDP) in the context of Pakistan’s economic situation. According to the World Bank report, due to limited foreign exchange reserves, increase in interest rate and economic crisis, the chances of economic development of Pakistan have decreased.
Pakistan’s economy is expected to grow by 0.4 percent this year, while the World Bank had predicted in October that the GDP would grow at a rate of 2 percent.
The report also takes into account the impact of Pakistan’s agreement with the IMF. Pakistan’s financial year runs from July to June, this year the country’s economy is expected to grow by 2 percent. Governor State Bank of Pakistan Jameel Ahmad informed in January that the GDP forecast will be further reduced.
According to the report, Pakistan has been suffering from economic crisis for a long time apart from the imbalance of payments and since 2019, the funding of 1 billion 10 million dollars has not been received from the IMF under the bailout package. Due to deterioration in economic conditions and inflation, stampede and looting is being seen in the distribution of flour.
The World Bank report states that rising local and international food prices have increased food insecurity for the poor citizens of South Asia. People in South Asia spend a large portion of their income on food. The World Bank cut its regional growth forecast for this year to 5.6 percent from 6.1 percent in October.
According to the report, the economies of the region are under pressure due to rising interest rates and uncertainty in the international markets. After the Russia-Ukraine war broke out last year, several countries raised interest rates, affecting supply chains and raising international inflation.
Meanwhile, the State Bank of Pakistan announced the monetary policy and increased the interest rate by 100 basis points to 21%. According to the State Bank statement, the rate of inflation last month was 35.4 percent, which is likely to remain high in the future. In the declaration, the possibility of reduction in wheat production as per the target has been shown.