Pakistan’s real Gross Domestic Product (GDP) is to grow at 2.0% in the fiscal year 2022-23 (FY23), according to the World Bank’s latest report forecast, while global growth is also expected to slow “perilously close” to recession in 2023, slashing its economic forecast on high inflation, rising interest rates and Russia’s invasion of Ukraine.
The World Bank’s latest forecast points to a “sharp, long-lasting slowdown” with growth pegged at 1.7%, roughly half of the pace it predicted in June, said the bank’s latest Global Economic Prospects report. This is among the weakest rates seen in nearly three decades, overshadowed only by the pandemic-induced recession of 2020 and global financial crisis in 2009.
As per the World Bank report titled ‘Global Economic Prospects-January 2023’ released on Tuesday, Pakistan’s real GDP was half the pace that was anticipated last June.
The report highlighted that in Pakistan, an already precarious economic situation, with low foreign exchange reserves and large fiscal and current account deficits, was exacerbated last August by severe flooding, which cost many lives.
Pakistan faces challenging economic conditions, including the repercussions of the recent flooding and continued policy and political uncertainty, it said.
In advanced economies such as the US, growth will likely slow to 0.5% in 2023 -- 1.9 points below June’s forecast. Meanwhile, the euro area is expected to flatline as it battles severe energy supply disruptions and price hikes related to Russia’s invasion. China is predicted to expand 4.3% this year, 0.9 points lower than the earlier forecast.
“Emerging and developing countries are facing a multi-year period of slow growth driven by heavy debt burdens and weak investment,” warned World Bank President David Malpass.
Published in The Express Tribune, January 11th, 2023.
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