Pakistan's economy to grow by 2 pct in current fiscal year

The World Bank has forecasted that Pakistan's economy is expected to grow by 2 percent in the current fiscal year, down by 2 percentage points from its June 2022 estimates.

The World Bank in its recent Global Economic Prospects report attributed the slowdown to "an already precarious economic situation, with low foreign exchange reserves and large fiscal and current account deficits exacerbated last August by severe flooding, which cost many lives."

About one-third of the country's land area was affected by the flood, which damaged infrastructure, and directly affected about 15 percent of the population, the report said.

The recovery and reconstruction needs are expected to be 1.6 times the 2022-2023 fiscal year's national development budget, it added.

"The flooding is likely to have seriously damaged agricultural production, which accounts for 23 percent of GDP and 37 percent of employment by disrupting the current and upcoming planting seasons and pushed between 5.8 and 9 million people into poverty," the report said.

Policy uncertainty further complicates the economic outlook of the South Asian country, according to the World Bank.