The World Bank’s latest report forecasts a 2.8 per cent growth rate for Pakistan in the fiscal year 2025.
The report highlights that 40.5 per cent of the population is expected to remain below the poverty line, stating the nation’s high poverty rate.
The report points to several key issues hindering Pakistan’s economic progress, including a rapidly growing population, low tax revenues, and a faltering energy sector.
One of the major threats to financial stability is the increasing circular debt in the energy sector, which has now reached Rs2,600 billion.
To address these issues, the World Bank recommends that Pakistan adopt stringent economic measures such as reducing subsidies, increasing tax revenue, and promoting exports. Additionally, the report highlights the need for structural reforms in the energy sector to resolve the circular debt crisis and ensure long-term economic growth.
Despite these obstacles, the World Bank is optimistic about Pakistan’s future. It predicts that the GDP growth rate will increase to 3.2 per cent in the next fiscal year and the poverty rate will decline to 39 per cent within two years.
This report follows comments by Pakistan’s Finance Minister, Senator Muhammad Aurangzeb, comment on the report and expressed optimism about the country’s economic recovery.
Aurangzeb noted improvements in macroeconomic stability, including a primary surplus, reduced current account deficit, stabilized currency, and increased foreign exchange reserves.
The minister also highlighted the government’s role in facilitating the private sector, welcoming Saudi Arabian delegates to explore trade and investment opportunities through a Business-to-Business (B2B) model.
Aurangzeb cited the reduction in inflation from 38 per cent to 6.9 per cent and a drop in the policy rate as further indicators of economic progress.
