World Bank projects Pakistan growth at 3.8%, inflation at 8.2%

Pakistan’s economy is projected to grow by 3.8% in the current fiscal year, while inflation could reach 8.2%, according to a new World Bank report covering the economies of Pakistan, Afghanistan, the Middle East and North Africa.

The report paints a mixed picture, with modest economic growth accompanied by persistent inflation, poverty pressures, expensive fuel and rising debt-servicing costs.

According to the World Bank, Pakistan’s real GDP is expected to expand by 3.8% during the current fiscal year. However, after factoring in population growth, per capita real GDP growth is projected at just 2.2%, indicating a more modest improvement in economic output available per person.

The report estimates Pakistan’s inflation rate at 8.2% for the fiscal year, highlighting continued pressure on household purchasing power.

The World Bank has projected Pakistan’s budget deficit at 3.5% of GDP during the current fiscal year.

Meanwhile, the country’s current account deficit is estimated at 0.8% of GDP, reflecting continued external-sector pressures despite the broader economic stabilization efforts.

Pakistan accounts for 48% of region’s poor

The World Bank report also highlights the scale of poverty across the region. People earning less than $3 a day, equivalent to approximately Rs840, are considered to be living below the specified poverty threshold in the report.

Pakistanis account for 48% of the total population in the region living below this poverty line, underscoring the continuing impact of economic hardship on households.

The report attributes rising poverty to prolonged economic adjustments, including stringent fiscal policies and difficult economic decisions. It also identifies the 2022 floods, the COVID-19 pandemic, inflation and depreciation of the rupee as factors that contributed to worsening poverty levels.