According to the World Bank’s Global Economic Prospects report, Pakistan’s economic growth is expected to slow further to two percent during the current year. This marks a drop of two percentage points from its June 2022 estimates. The report states that while growth remains robust in neighboring countries such as India, Maldives, and Nepal, the floods in Pakistan and economic and political crises in Afghanistan and Sri Lanka have had a negative impact on the region’s overall growth. Additionally, the report notes that the global economic environment will also weigh on investment in the region.
The report also notes that Pakistan’s economic output is not only declining itself but is also bringing down the regional growth rate. Despite this, the report forecasts that Pakistan’s GDP growth rate will improve to 3.2 percent in 2024. However, the report cites policy uncertainty as a major factor that complicates the economic outlook for Pakistan.
The devastating floods in 2022 were also cited as a reason for the precarious economic situation in the country. The floods affected almost one-third of Pakistan and directly impacted about 15 percent of the population. The report estimates that the recovery and reconstruction needs are expected to be 1.6 times the FY2022-23 national development budget.
This news comes as food prices in Pakistan have spiked rapidly in the past month. This further exacerbates the economic challenges facing the country. The World Bank report highlights the need for policymakers to address the underlying issues and implement policies that promote economic growth and stability.