According to the World Bank report, the increase in coronavirus positive cases linked with a slow vaccination process due to the high inflation rate and consolidation policies may impact Pakistan’s recent economic recovery and increasing poverty situation.
In its flagship ‘Pakistan Development Update-Navigating in Uncertain Times’ released on Tuesday, the World Bank said the country has been facing difficulty in its economic recovery by resuming economic dynamics gradually and was expected to achieve a growth rate of 1.3pc and strengthen to an average of 2.7pc in FY23.
The report said,the basic economic growth forecast looks highly uncertain, especially due to the more dangerous third wave of the pandemic currently going through the country. The “resurgence in infection rates and slow vaccination deployment poses downside risks to the economic outlook and near-term economic prospects are subdued”, it added.
Meanwhile, the economic activity is projected to be
dampened in the short-term by fiscal consolidation measures associated with the IMF stabilization program, which is expected to resume as the economy regains its footing. The outlook entails a gradual post-Covid recovery, during which economic growth is expected to remain below potential, reaching 1.3pc of GDP in FY21 and strengthening to 3.4pc in FY23.