{"id":13312,"date":"2023-01-11T12:43:26","date_gmt":"2023-01-11T12:43:26","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=13312"},"modified":"2023-01-11T12:43:26","modified_gmt":"2023-01-11T12:43:26","slug":"world-bank-slashes-pakistans-gdp-growth-projection-by-half","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/world-bank-slashes-pakistans-gdp-growth-projection-by-half\/","title":{"rendered":"World Bank slashes Pakistan’s GDP growth projection by half"},"content":{"rendered":"

World Bank slashes Pakistan’s GDP growth projection by half. The World Bank predicted Pakistan’s economic growth to reduce to half \u2014 down by 4% to 2% \u2014 for the current fiscal year, owing to the precarious economic situation and devastating floods.<\/p>\n

\u201cNonetheless, Pakistan faces mounting economic difficulties and Sri Lanka remains in crisis. In all regions, improvements in living standards over the half-decade to 2024 are expected to be slower than from 2010-19,\u201d the World Bank<\/a> stated in Global Economic Prospects released on Tuesday.<\/p>\n

As per the report, Pakistan’s economy with low foreign exchange reserves and large fiscal and current account deficits was exacerbated last August by severe flooding. About one-third of the country\u2019s land area was affected, damaging infrastructure, and directly affecting about 15% of the population.<\/p>\n

Recovery and reconstruction needs are expected to be 1.6 times the FY2022\/23 national development budget (Government of Pakistan). The flooding is likely to have seriously damaged agricultural production \u2014 which accounts for 23% of GDP and 37% of employment \u2014 by disrupting the current and upcoming planting seasons and pushed between 5.8 and 9 million people into poverty. Policy uncertainty further complicates the economic outlook.<\/p>\n

Read more:\u00a0Pakistan\u2019s annual GDP can fall 18-20% by 2050 due to climate change risks: WB<\/a><\/strong><\/em><\/p>\n

Pakistan, with low foreign exchange reserves and rising sovereign risk, saw its currency depreciate by 14% between June and December and its country risk premium rise by 15 percentage points over this same period.<\/p>\n

Pakistan\u2019s consumer price inflation reached 24.5% in December on an annual basis, recently coming off its highest rate since the 1970s.<\/p>\n

This is mainly due to weak growth in Pakistan, which is projected at 2% in FY2022\/23, half the pace that was anticipated last June. Pakistan faces challenging economic conditions, including the repercussions of the recent flooding and continued policy and political uncertainty. As the country implements policy measures to stabilise macroeconomic conditions, inflationary pressures dissipate and rebuilding begins following the floods, growth is expected.<\/p>\n

The recent floods in Pakistan are estimated to have caused damage equivalent to about 4.8% of GDP. Extreme weather events can exacerbate food deprivation, cut the region off from essential supplies, destroy infrastructure, and directly impede agricultural production.<\/p>\n

Estimates for Bangladesh suggest that current climate trends will see rice, vegetables and wheat yields decline by 5-6% by 2050 compared to a no-climate change scenario. Extreme weather can also complicate the implementation of macroeconomic policies.<\/p>\n

For example, in India, more erratic monsoon rains have translated into more volatile food prices, destabilising households\u2019 inflation expectations, undermining the ability to forecast inflation and muddling the formulation of monetary policy, the report said.<\/p>\n

India used its international reserves (at $550 billion in November, or 16% of GDP) to curb excess exchange rate volatility helping to limit rupee depreciation, and its sovereign spread has remained broadly stable at 1.4% in December, similar to average levels in the five years before the pandemic.<\/p>\n","protected":false},"excerpt":{"rendered":"

World Bank slashes Pakistan’s GDP growth projection by half. The World Bank predicted Pakistan’s economic growth to reduce to half \u2014 down by 4% to 2% \u2014 for the current fiscal year, owing to the precarious economic situation and devastating floods. \u201cNonetheless, Pakistan faces mounting economic difficulties and Sri Lanka remains in crisis. In all […]<\/p>\n","protected":false},"author":8,"featured_media":9324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[559,3516,3175,1268,272,138],"class_list":["post-13312","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-climate-change","tag-gdp","tag-price-hike","tag-world-bank","tag-government-of-pakistan","tag-pakistan"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/13312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=13312"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/13312\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/9324"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=13312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=13312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=13312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}