Business

Pakistan’s GDP Growth Forecast Reduced to 0.4% by World Bank for FY23-24

Pakistan’s economic growth prospects have been weakened due to tighter financial conditions and limited fiscal space, prompting the World Bank to significantly reduce its growth forecast for the country this year. The World Bank’s latest projection indicates that Pakistan’s economy will only grow by 0.4% this year, down from its previous estimate of 2% growth in October. This less optimistic forecast is based on the assumption that Pakistan will secure bailout funds from the International Monetary Fund.

The fiscal year in Pakistan begins in July and concludes in June. Although Pakistan anticipates a 2% growth rate in FY23, the head of the country’s central bank warned in January that the growth projection may encounter a decline in the near future.

Also Read: World Bank Forecasts India’s GDP Growth to Slow Down to 6.3% in FY24

For several months, the South Asian country has been experiencing severe economic turmoil due to a significant balance of payments crisis. Despite negotiations with the International Monetary Fund (IMF) to acquire $1.1 billion funding as part of a $6.5 billion bailout that was agreed upon in 2019, the country has yet to receive any funds.

The establishment of flour distribution centers in Pakistan has resulted IMF in riots and thefts. This is due to the combination of reduced economic productivity and increased prices.

Moreover, the World Bank has reported that South Asia’s impoverished populations are experiencing a higher degree of food insecurity, as they must allocate a significant portion of their income towards food due to increased global and domestic food prices. Consequently, the bank has revised its regional growth estimate for 2023 to 5.6%, down from the previous forecast of 6.1% in October.

According to the report, the region’s economies are facing downward pressure due to the escalation of interest rates and financial market uncertainty. As a result of the conflict in Ukraine last year, which disrupted supply chains and caused global inflation, most countries have rapidly increased their interest rates.

Also Read: FY23 Witnesses 8% Increase in FMCG Sales, Electronics Elevates by 25%

Furthermore, the World Bank has predicted that Sri Lanka’s economy will undergo a 4.3% contraction this year due to the long-term consequences of the macro debt crisis. The country’s potential for future growth is heavily reliant on debt restructuring and structural reforms. Sri Lanka follows the calendar year, and in January, President Ranil Wickremensinghe anticipated a 3.5% or 4.0% decline in the country’s economy for 2023, following an 11% decrease in 2022. The World Bank has also projected that inflation in South Asia will decrease to 8.9% this year and below 7% in 2024.

Due to anticipated negative effects on consumption, the World Bank has revised its forecast for India’s economic growth in the current fiscal year (starting April 1) from 6.6% to 6.3%, reflecting a decrease in the country’s projected economic expansion.

Shruti Rag

Recent Posts

Trump Set to Sell His Tesla Car As Clash With Elon Musk Escalates

US President Trump is reportedly planning to sell his Tesla car, purchased in March to…

10 mins ago

Musk-Trump Fallout Threatens NASA And Pentagon Operations: Report

A recent fued between Elon Musk and former US President Donald Trump has raised serious…

44 mins ago

Rajeshwar Singh Honoured With ‘Excellence In Political & Public Life’ Award At House Of Lords

Rajeshwar Singh was honoured with the ‘Excellence in Political and Public Life’ Award at the…

45 mins ago

EaseMyTrip Launches ‘EMT Invest’ To Back Profitable Businesses: CEO Nishant Pitti

India’s leading travel tech company, EaseMyTrip, has launched a new investment platform named ‘EMT Invest’,…

52 mins ago

MyGov Launches Exciting Contests To Celebrate 11 Years Of Transformative Governance

Marking 11 years of transformative governance, citizen engagement platform MyGov has launched a series of…

3 hours ago

President Murmu And PM Modi Extend Eid Al-Adha Wishes, Call For Unity And Service

On Saturday, President Droupadi Murmu and PM Modi extended warm wishes to citizens on occasion…

4 hours ago