World Bank releases Development Update on Pakistan’s economy
The World Bank has released its Development Update Report on Pakistan’s economy, forecasting 2.8% GDP growth for the current fiscal year. According to the report, Pakistan’s current account deficit is expected to remain at 0.6% of GDP, with a fiscal deficit at 7.6% and total national debt reaching 73.7% of GDP.
The World Bank also predicts that Pakistan’s GDP growth could improve to 3.2% in the next fiscal year, but highlights that the country needs to create 1.6 million jobs annually to support its growing youth population.
Additionally, poverty levels in Pakistan are projected to drop to 39% over the next two years, but officials stress the need for higher economic growth.
The World Bank emphasized the importance of continuing strict economic policies for Pakistan to achieve economic stability. Key areas requiring reform include pension reforms, reducing unnecessary spending, and eliminating the culture of tax exemptions.
Specifically, the report urges the government to end tax breaks for sectors like real estate and agriculture and to boost exports by abandoning anti-export policies.
Pakistan’s energy sector remains a significant challenge, with circular debt rising to Rs. 2.6 trillion. Losses in distribution companies have exceeded their net equity, and the World Bank warns that resolving circular debt will not be possible without full recovery of tariffs. It also highlights that some consumers are being overcharged in energy tariffs.
