The World Bank’s latest report on the impact of the coronavirus on South Asian economies has predicted that Pakistan’s economy will only grow by only 0.5% in the upcoming fiscal year. The report, titled “2021 Global Economic Prospects”, goes on to say that Pakistan, as well as other countries in the region, have been badly effected by the COVID-19 pandemic, causing a downturn in economic activity. The restrictions imposed to stop the spread of the coronavirus in 2020, and Pakistan’s previous economic woes are said to have caused a 1.5% contraction in the country’s economic growth rate in the previous fiscal year. Furthermore, the report warns of a rise in poverty in Pakistan, as well as other countries in the region in the years to come.
Looking at the bigger picture, the report predicts an average growth of 1.3 percent for the economy in the next two years, which is an improvement on previous expectations. However, this still falls significantly below growth potential sans-pandemic. The weak economic prospects for the country by the World Bank hinge on factors such as a crippled services sector, which makes up half of Pakistan’s economic output and is especially vital to lower income household. This is also the reason behind a projected increase in poverty in the nation as lower-class citizens find themselves without work or a stable source of income. Dwindling foreign exchange reserves and upcoming debt payments further compound on the issue.
Overall, the report states that overall global economic grow will be restrained to around 4%. This figure may become even lower depending on how well countries can fight off the coronavirus and avoid further lockdowns this year. Moreover, the pandemic is expected to bring about a decade long slowdown in economic growth around the world.
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