KARACHI: The World Bank has estimated a decline in GDP per capita income for Pakistan, with a drop from $1,613.8 in 2021-22 to $1,399.1 in 2022-23.
This was revealed in the bank’s latest report titled “Macro Poverty Outlook for Pakistan: April 2023”, which also noted that the GDP per capita growth is estimated to decrease by -1.5 percent in 2022-23, compared to a growth of 4.2 percent in 2021-22.
The report further revealed that the unemployment rate is expected to increase to 10.2 percent in 2022-23, up from 10.1 percent in 2021-22, and poverty will inevitably increase due to weak labor markets and high inflation. The lower-middle-income poverty rate is also expected to rise to 37.2 percent in FY23, unless there is an increase in social spending. The report highlighted that poor households in Pakistan, who rely heavily on agriculture and small-scale manufacturing and construction activities, remain vulnerable to economic and climate shocks.
The report also pointed out that gross investment is estimated to decline to 106 percent in 2022-23, compared to 13.3 percent in 2021-22. The gross investment in the public sector is estimated to be 2.8 percent in 2022-23, down from 3.4 percent in 2021-22. Moreover, private consumption growth is projected to slow down to 1.3 percent in 2022-23 from 10 percent in 2021-22. The Bank has estimated revenue to decline to 10.9 percent of GDP in 2022-23 compared to 12.1 percent in 2021-22.
The report highlighted that Pakistan’s economy is under stress due to low foreign reserves and high inflation. Policy tightening, import controls, high borrowing and fuel costs, low confidence, and protracted policy and political uncertainty have all contributed to the fall in economic activity. The Bank projected that despite some recovery, growth is expected to remain below potential in the medium term.
