World Bank warns Pakistan heading towards ‘uncertain’ future as risk of debt crisis looms
The World Bank warned Pakistan to scramble for foreign loans immediately in order to avert “public debt crisis,” as almost 4 million Pakistanis are on the verge of getting pushed to poverty as the country gets battered by several economic jolts. According to The Express Tribune, the financial institution highlighted in its ‘Pakistan Development Update’ report that the South Asian country is heading towards a flattened economic growth trajectory, with an average inflation rate projected to be 29.5% for this year and 18.5% in the next year.
For the World Bank, the country’s future remains “highly uncertain” as projections show merely 0.4% economic growth this fiscal year and 2% in the next. Furthermore, “poverty is projected to increase to 37.2% in FY23, pushing an additional 3.9 million people into poverty as compared to last fiscal year.”
The World Bank has also slammed the Shehbaz Sharif government for “ad hoc administrative measures to preserve scarce foreign exchange reserves, but these measures have weakened consumer and investor confidence.”
What’s the way out? World Bank tells
The financial body’s only advice to restore some stability in Pakistan is the implementation of reforms agreed upon under the International Monetary Fund (IMF) programme, and securing external refinancing. It also suggested that the government should remove all import and dollar outflow restrictions and establish some foundations for medium-term recovery.
Recently, the World Bank also noted that Pakistan poorly invests in human capital, which could ruin its goal of becoming an upper-middle-income country by 2047. The Pakistan Human Capital Review warned that if the country continues to walk down the same road, its GDP per capita is estimated to increase only by 18% by the 100th anniversary of its inception.
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