The World Bank has released a fresh report on Pakistan’s economy, in which the country’s economic growth rate is expected to be 2.6 percent this year. However, the report warns that the economy is still under pressure due to flood damage and weak infrastructure.
According to the report, agricultural production in Punjab is expected to decline by at least 10 percent, while important crops like rice, sugarcane, cotton, wheat and maize have been severely affected by rains and floods. The World Bank says that these losses may increase pressure on both public services and the budget.
The organization clarified in its report that the losses caused by the recent rains have created the possibility of raising the inflation rate to 7.2 percent, the effects of which will reach the common citizens. Nevertheless, the bank says that if attention is paid to the immediate restoration of infrastructure and improvement in agricultural production, the situation can be significantly improved.
The World Bank says that tariff reforms and a possible reduction in interest rates can increase exports and improve economic activity. According to the report, Pakistan’s growth rate is expected to recover to 3.4 percent in the next fiscal year.
The report further states that although inflation is likely to fall into single digits in the current fiscal year, the effects of flood damages may persist until 2027, which raises the risk of price increases.
The World Bank has advised the Pakistani government to focus urgently on economic reforms, infrastructure restoration, and strengthening the agricultural sector, so that the country can move quickly on the path of economic stability.
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