ISLAMABAD:In a dire forecast unveiled on Tuesday, the World Bank cautioned that over 10 million additional individuals in Pakistan face the looming threat of descending into poverty.
The apprehension stems from a sluggish economic growth rate of 1.8% coupled with soaring inflation at a staggering 26% for the current fiscal year.
The Washington-based lender’s biannual Pakistan Development Outlook report painted a grim economic picture, indicating that the nation is poised to miss almost all major macroeconomic targets.
Notably, the country is anticipated to fall short of its primary budget target, remaining in deficit for three consecutive years, contrary to the International Monetary Fund’s (IMF) stipulations mandating a surplus.
Lead author of the report, Sayed Murtaza Muzaffari, highlighted that despite a broad-based yet nascent economic recovery, poverty alleviation efforts remain insufficient.Economic growth is projected to stagnate at a paltry 1.8%, maintaining the poverty rate at around 40%, with approximately 98 million Pakistanis already grappling with poverty.
The report underlined the vulnerability of those hovering just above the poverty line, with 10 million individuals at risk of slipping into poverty in the face of shocks.
The WB said that the poor and vulnerable are likely to have benefited from the windfall gain in agricultural output but these gains were offset by continued high inflation and limited wage growth in other sectors that employ many of the poor, such as construction, trade, and transportation.
The wages of daily labourers increased only 5% in nominal terms during the first quarter of this fiscal year when the inflation was above 30%.
The persisting cost-of-living crisis coupled with rising transportation costs could potentially lead to an increase in out-of-school children and delayed medical treatments, particularly for worse-off families, warned the WB. At the same time, food security remains a concern in parts of the country, it added.
Among 43 rural districts across Khyber Pakhtunkhwa, Sindh, and Balochistan, many of which were impacted by the 2022 floods, the prevalence of acute food insecurity is also projected to increase from 29% to 32% in the third quarter of this fiscal year.
“Poverty reduction is projected to stall in the medium term due to weak growth, low real labour incomes, and persistently high inflation,” said the WB.
