Islamabad: The World Bank says that Pakistan’s economic outlook for July 2023 to June 2024 is passive and the growth rate is estimated at only 1.7 percent. /span>
If the inflationary pressure decreases, the growth rate may reach 2.4% in the financial year 2024-25, but inflation will remain this year as well, poor households will spend more on food, which will increase food prices and so on. Poverty and inequality will increase.
According to the World Bank’s Global Economic Report, foreign investment in the region may be affected by the anxiety caused by the elections in the South Asian countries of Pakistan, India, Bangladesh and Maldives.
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If violence escalates along with political and social unrest, it will further worsen the weak economy and economic growth rate. Increasing food insecurity could spread the current tensions in the Middle East.
Regarding Pakistan, the report says that monetary policy is expected to remain tight to control inflation, while fiscal policy will also tighten, reflecting debt servicing pressure. Weak confidence arising from political unrest will play a role in slowing private demand.
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The report says that financing will have to be increased for Maldives, Pakistan and Sri Lanka. Interest payments are projected to be higher for countries with increased debt, including India, Pakistan and Sri Lanka.
Production in Pakistan shrank by 0.2 percent in FY 2022-23 and consumer price inflation remained high due to 2022 flood damage and political uncertainty. This partly reflects the depreciation of the currency in early 2023. However, by the end of 2023, the rupee showed signs of stabilization due to several factors.
