WB predicts Pakistan's economic growth rate at 0.5%

ISLAMABAD: World Bank has predicted Pakistan’s economic growth rate at 0.5 percent, much below government expectations.

In its report on South Asia, World Bank has stated that Pakistan is projected to fare the worst, with poverty rising due to the coronavirus-related lockdowns which affected the informal service sector and small industrial businesses.

The report predicted an increase in poverty for the entire region in the wake of the pandemic and ensuing lockdowns. The report predicted that an additional 930,000 children will drop out of school in the current fiscal year.

The Lockdown measures have deeply affected non-farm sectors that provide livelihoods to the most vulnerable segments of the population, particularly in urban areas. With government estimates of pandemic job losses at approximately 14 million, poverty is expected to increase for the first time in two decades, it added.

Overall, the economic growth in Pakistan is expected to gradually recover but remain muted, given heightened uncertainty and the resumption of demand compression measures. However, a possible resurgence of the infection, triggering a new wave of global or domestic lockdowns, and further delaying the implementation of critical structural reforms are the major downside risks to the above outlook.

Moreover, locust attacks and heavy monsoon rains could lead to widespread crop damage, food insecurity, and inflationary pressures, and livelihoods for households dependent primarily on agriculture could also be negatively impacted, the report concluded.