A damning World Bank report has revealed that over 30% of Pakistan’s rural population is slipping into poverty, while unemployment is also rising. The report also presents a bleak outlook on the country’s economy and says that
economic activity in Pakistan will go down with the revival of the International Monetary Fund (IMF) loan program, with economic growth projected at just 1.3% for the current fiscal year. The World Bank also said that the percentage of food insecure population had tripled from 3% to 10%.
“Pakistan’s economy has been growing slowly over the past two decades. Annual per capita growth has averaged only 2%, less than half of the South Asia average, partly due to inconsistent macroeconomic policies and an under-reliance on investment and exports to drive economic growth.”, the report said.
The World Bank’s detailed report on Pakistan should set off alarm bells in the government’s sphere, as the report shows signs of impending doom for Pakistan’s social and economic landscape.
“The economic activity is projected to be dampened in the short term with the resumption of the IMF stabilization program, expected to resume as the economy regains its footing,” the report.
However, the government remains in denial and has contrasting claims to present.
Pakistan's economy will this year grow at a faster rate than earlier forecasts.
Starting from next fiscal year, we will be targeting an even higher growth rate that may exceed 4% per annum.
This growth will not be based on deficits or depleting reserves but will be sustainable
— Hammad Azhar (@Hammad_Azhar) April 6, 2021
The report also noted that electricity and gas tariffs steadily increased from July 2019 to January 2020. A 168% hike in gas tariffs was approved at the beginning of FY20 to pass on energy sector arrears to consumers. These tariff hikes were a critical contributory factor to the high headline inflation in FY20, it added.