Islamabad: The World Bank has said in its latest report that although Pakistan’s economy is gradually moving towards recovery, inflation, flood damage and weak infrastructure are still serious threats to the economy.
The report states that recent rains and devastating floods have severely affected important crops such as rice, cotton, sugarcane, wheat and maize, due to which agricultural production in Punjab is expected to decrease by at least 10 percent. The World Bank says that these losses are likely to affect public services and put additional pressure on the national budget.
The World Bank warned that the effects of flood damage could persist until 2027, which could lead to price increases and inflation accelerating again. Although inflation is expected to fall into single digits this fiscal year, the severity of environmental damage is increasing the risks.
The organization has said in its report that tariff reforms and interest rate cuts can increase Pakistan’s exports, which can improve economic activity. According to the World Bank, if attention is paid to reform measures, improvement in agricultural production and restoration of infrastructure, Pakistan can achieve economic stability in the coming years.
According to the report, Pakistan’s growth rate is likely to be 2.6 percent this year, while this rate may increase to 3.4 percent in the next fiscal year. The World Bank said that the losses caused by the recent rains have raised the fear of raising the inflation rate to 7.2 percent, the effects of which will directly affect the common citizens.
The World Bank has advised the government of Pakistan to accelerate economic reforms, ensure immediate restoration of infrastructure and strengthen the agricultural sector so that the country can move towards sustainable development.
