World Bank offers dimmer outlook for Pakistan’s economy
The World Bank has projected Pakistan’s economy to grow by two per cent in the next fiscal year, compared to the 3.5pc target set by the National Economic Council on Tuesday. “In Pakistan, the lasting effects of the August 2022 floods, along with policy uncertainty and limited foreign exchange resources to pay for imports of food, energy, and intermediate inputs, have depressed activity, with industrial production contracting by about 25pc in the year to March 2023,” the bank said in its latest Global Economic Prospects report, released on Tuesday. “With dwindling foreign exchange reserves and stagnant remittances, the government has increased exchange rate flexibility, allowing the Pakistani rupee to depreciate by 20pc since the start of the year,” it added. “Consequently, headline consumer price inflation has risen sharply, reaching 38pc in the year to May, its highest level since records began in the late 1970s.” It said that consumer price inflation remains above target in most economies and is particularly high in Pakistan and Sri Lanka. Limited foreign exchange reserve cover in some economies limits access to imported intermediate goods for production, it said.