The World Bank has issued a cautionary statement, predicting that over 10 million Pakistanis might slip below the poverty line due to sluggish economic growth and soaring inflation, expected to reach a staggering 26 percent this fiscal year. In its bi-annual report titled ‘Pakistan Development Outlook,’ the World Bank paints a bleak picture of the country’s economy, suggesting it could miss major macroeconomic targets.
The report underscores the inadequacy of poverty alleviation efforts despite a modest economic recovery, projecting economic growth to stagnate at a mere 1.8 percent. With around 98 million Pakistanis already living in poverty, approximately 10 million more individuals are at risk of falling into poverty due to various economic shocks.
Additionally, the persistent inflationary pressures and rising living costs pose challenges such as increased out-of-school children and delayed medical treatments, exacerbating food security concerns. The World Bank warns that unless addressed, chronic inflation and policy uncertainty could fuel social unrest and further worsen welfare outcomes.
Economic growth prospects remain subdued, with the current fiscal year expected to see growth of only 1.8 percent, significantly below the official target of 3.5 percent. The outlook for the next fiscal year is equally grim, with growth projected at a meager 2.3 percent, falling below the population growth rate of 2.6 percent.
The report attributes the sluggish recovery to prudent monetary and fiscal policies, import management measures aimed at preserving foreign reserves, and subdued economic activity amid weak confidence. Overall, the indicators on circular debts, inflation, and GDP growth paint a bleak outlook for Pakistan’s economy, offering little hope for improvement in the near future as more citizens slide into poverty each day.
