The World Bank has projected a slowdown in Pakistan’s economic growth, which it says will fall to 4% in 2022-23 from 5.7% in the 2020-21 financial year.
“In Pakistan, growth is expected to slow from 5.7% in FY 2020/21 to 4% in 2022/23 as foreign demand slows significantly and policy support is withdrawn to contain external and fiscal imbalances” , said the World Bank in its latest World Economic Outlook. June report.
In the report, the World Bank also cut its estimate for global economic growth to 2.9 percent, 1.2 percentage points lower than the January forecast, due to Russia’s invasion of China. Ukraine which caused a serious slowdown.
The projection for Pakistan comes as the economy remains plagued by various challenges, including a growing current account deficit amid a soaring import bill and rising debt payments, which has worsened the position of the country’s foreign exchange reserves.
Last week, the Ministry of Planning, Development and Special Initiatives presented a document to the Annual Plan Coordinating Committee (APCC), which predicted a slowdown in economic growth in the next fiscal year 2022-23 following the recovery. likely from the International Monetary Fund. (IMF), fiscal adjustment efforts, the fight against the deterioration of the trade balance and the alleviation of political and economic uncertainty.
“Given the uncertain external and local economic environment, GDP growth will decline slightly and is projected at 5% for 2022-23 driven by agriculture (3.9%), manufacturing (7.1% ) and the service sector (5.1%),” the government document states.
Earlier, Finance Minister Miftah Ismail, addressing a gathering of business figures, said on Tuesday that GDP growth would be positive “either four percent, five percent or six percent for the next financial year and will also control inflation”.
Meanwhile, the World Bank pointed out that in Pakistan, annual headline consumer inflation hit double digits at the end of last year and accelerated further in 2022.
In response, the Central Bank of Pakistan raised rates.
“Some authorities have put in place policies to cushion the impact of high inflation. In Pakistan, for example, the government announced in February a program to reduce energy prices. However, gasoline and diesel prices at the pump have recently increased,” the report said.
However, the report identified Pakistan among the economies that have prioritized structural reforms to boost economic growth.
“In Pakistan, the government has improved its monetary policy framework by strengthening the functional and administrative autonomy of the central bank, prohibiting governments from borrowing from the central bank, and making price stability the primary objective. monetary policy,” the report said.