- Says poverty will inevitably increase with pressures from weak labour markets and high inflation
ISLAMABAD: The World Bank has estimated a decline in GDP per capita income for Pakistan, ie, from $1,613.8 in 2021-22 to $1,399.1 in 2022-23.
The bank in its report 'Macro Poverty Outlook for Pakistan: April 2023' noted that GDP per capita growth is estimated at -1.5 percent in 2022-23 compared to 4.2 percent in 2021-22.
The unemployment rate is estimated to increase to 10.2 percent in 2022-23 compared to 10.1 percent in 2021-22. Poverty will inevitably increase with pressures from weak labour markets and high inflation.
In the absence of higher social spending, the lower middle-income poverty rate is expected to increase to 37.2 percent in FY23. Given poor households’ dependency on agriculture, and small-scale manufacturing and construction activity, they remain vulnerable to economic and climate shocks.
Gross investment is estimated to decline to 106 percent in 2022-23 against 13.3 percent in 2021-22. Gross Investment - Public is estimated to be 2.8 percent in 2022-23 compared to 3.4 percent in 2021-22.
Private Consumption growth is estimated at 1.3 percent in 2022-23 compared to 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 bank noted that Pakistan’s economy is under stress with low foreign reserves and high inflation.
Activity has fallen with policy tightening, flood impacts, import controls, high borrowing and fuel costs, low confidence, and protracted policy and political uncertainty. Despite some projected recovery, growth is expected to remain below potential in the medium term, the report added.
Copyright Business Recorder, 2023