About 10 Million People At Risk Of Slipping Into Poverty In Pakistan: World Bank
The World Bank has released a concerning forecast for Pakistan’s economy, highlighting the significant risk of poverty that looms over the nation. In its latest biannual report, the Washington-based financial institution warns that over 10 million individuals might soon find themselves below the poverty line due to the country’s economic challenges.
The report, titled “Pakistan Development Outlook,” suggests that Pakistan is on the verge of missing critical macroeconomic goals. The projected economic growth rate stands at a meager 1.8 percent, far below the necessary levels to support a substantial reduction in poverty. This sluggish growth is occurring amidst an inflation rate that has skyrocketed to 26 percent in the current fiscal year, placing additional strain on the country’s economy.
According to the World Bank, the anticipated shortfall in achieving the primary budget target – remaining in deficit for the third consecutive year – contradicts the aspirations set forth by the International Monetary Fund, which required a budget surplus. This discrepancy highlights the continuing financial challenges facing Pakistan.
The report’s lead author, Sayed Murtaza Muzaffari, points out that despite a nascent economic recovery, efforts towards alleviating poverty are falling short. With economic growth stagnating at 1.8 percent and the poverty rate hovering around 40 percent, an estimated 98 million Pakistanis are already struggling with poverty. The situation is exacerbated for those slightly above the poverty line, with 10 million individuals at risk of descending into poverty.
The agricultural sector, though experiencing a boost in output, has not been able to shield the poor and vulnerable from the adverse effects of rampant inflation and stagnant wage growth in critical employment sectors like construction, trade, and transportation. In the first quarter of this fiscal year, wages for daily laborers saw a nominal increase of merely five percent amid inflation rates exceeding 30 percent.
As the cost-of-living crisis intensifies, the World Bank cautions about the potential rise in out-of-school children and delayed medical treatments, particularly among the less fortunate. Furthermore, food security remains a significant concern, with acute food insecurity expected to rise in several rural districts affected by recent floods.
The report also addresses Pakistan’s current account deficit, which has narrowed thanks to import controls and lower global commodity prices. However, remittances have declined, adding to the economic pressures. Inflation is expected to continue its upward trend, further complicating the lives of those with limited resources and savings.
Looking ahead, the World Bank anticipates that Pakistan’s fiscal deficit will expand before fiscal consolidation efforts begin to show results. Economic growth predictions remain bleak, with an expected growth rate of just 1.8 percent for the current fiscal year, falling short of the official 3.5 percent target.
The outlook for the next fiscal year is not much brighter, with a projected economic growth rate of only 2.3 percent, still below the population growth rate. This forecast underscores the significant economic and social challenges ahead for Pakistan, highlighting the need for comprehensive and effective measures to secure a more prosperous future for its citizens.
