Pakistan's economy South Asia's weakest, World Bank report says amid crisis

Pakistan Economic Crisis: The report said that Pakistan’s economic output was not only declining itself but also bringing down the regional growth rate as well.

The World Bank forecast Pakistan’s economic growth to slow further to two percent during the current year. This will mark a drop of two percentage points from its June 2022 estimates, according to the World Bank’s Global Economic Prospects report.

Pakistan Economic Crisis: A woman checks rice prices at a main wholesale market in Karachi. (AFP)

“This pace reflects still robust growth in India, Maldives, and Nepal, offsetting the effects of the floods in Pakistan and the economic and political crises in Afghanistan and Sri Lanka. The deteriorating global environment, however, will weigh on investment in the region,” the report said pointing to a “sharp, long-lasting slowdown” with the global growth expected at 1.7 per cent this year.

The report, issued by a flagship publication of the World Bank Group, said that Pakistan’s economic output was not only declining itself but also bringing down the regional growth rate as well. Forecasting Pakistan's GDP growth rate to improve to 3.2 per cent in 2024, the report said, “Policy uncertainty further complicates the economic outlook” of Pakistan.

The report also cited devastating floods in 2022 as a reason for the precarious economic situation in the country. Floods deluged almost one-third of Pakistan and directly impacted about 15 percent of the country's population.

“Recovery and reconstruction needs are expected to be 1.6 times the FY2022-23 national development budget,” the report said.

This comes as food prices spiked rapidly in Pakistan in the past one month.