World Bank Projects decline in Pakistan’s Economy amid COVID 19

Syed Umarullah HussainiWeb Editor

12th Apr, 2020. 01:34 pm
The World Bank

World Bank in its new report has warned that due to the current pandemic, Pakistan may fell in to recision – first time in 68 years.

Media reports said , economy expected to be shrinking up to 2.2% and a painful decline in per capita income.

The World Bank projected a decline in Pakistan’s national output in the range of 2.2% to 1.3%, which will also hit personal incomes badly.

The report, “South Asia Economic Focus” anticipates a sharp economic slump in each of the region’s eight countries.

Report said “Pakistan, which has already experienced low growth rates in recent years, could well fall into a recession”, noted the report. With 1.8% population growth, that would imply a painful decline in per capita income.”

Pakistan’s GDP

Pakistan’s GDP may contract in the range of 2.2% to 1.3% in this fiscal year, reported the WB.

Pakistan is among Maldives, Sri Lanka and Afghanistan whose GDP growth forecast for this fiscal year in negative territory. In the worst case scenario, the whole region would experience a contraction of GDP, according to the WB.

“South Asia in a perfect storm”, said Hans Timmer, World Bank Chief Economist for the South Asia Region while speaking from Washington through an audio link.

Pakistan is already in a difficult fiscal situation so that makes response more difficult, said the regional chief economist.

Capital markets seem less vulnerable for the time being, but declines in capital flows may impact India and Pakistan, according to the WB.

If the coronavirus spreads further and lockdown measures remain in place for a long period, it will become more challenging to guarantee food security, especially for the most vulnerable in the population, said the WB.

The report underlined that close to 70% of the poorest group in India and Pakistan lacks either soap or water for hand washing.

It should not be a surprise that a highly transmissible disease could spread more quickly among those in poorer groups.

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