Business

WB cuts Pakistan’s GDP forecast on rising rates, limited fiscal space

Published

1 year ago

Farwa

World Bank expects economy to grow 0.4% in current year.
Bleaker forecast assumes agreement is reached with IMF.
World Bank lowers regional growth forecast to 5.6%.

The World Bank sharply lowered Pakistan’s current-year growth forecast, saying the country’s economic growth prospects have weakened due to tighter financial conditions and limited fiscal space.

The World Bank now expects Pakistan’s economy to grow 0.4% in the current year, from its October forecast of 2% growth. The bleaker forecast assumes an agreement is reached with the International Monetary Fund for bailout funds, it said.

Pakistan’s fiscal year starts in July and runs through June. Pakistan expects its economy to grow 2% in FY23, however, the country’s central bank chief said in January the growth forecast could face downward pressure.

The South Asian nation has been in economic turmoil for months with an acute balance of payments crisis while talks with the IMF to secure $1.1 billion in funding as part of a $6.5 billion bailout agreed upon in 2019 have not yet yielded fruit.

Lower economic output and high prices in Pakistan have led to stampedes and looting at flour distribution centres set up across the country.

“Elevated global and domestic food prices are contributing to greater food insecurity for South Asia’s poor who spend a larger share of income on food,” the bank said.

The World Bank lowered its 2023 regional growth forecast to 5.6% from 6.1% in October.

“Rising interest rates and uncertainty in financial markets are putting downward pressure on the region’s economies,” the report said.

Most countries have raised interest rates at a rapid pace since the war in Ukraine last year led to choking supply chains and stoked inflation globally.

The World Bank forecast Sri Lanka’s economy will contract by 4.3% this year, reflecting the lasting impact of the macro debt crisis, with future growth prospects heavily dependent on debt restructuring and structural reforms.

Sri Lanka follows the calendar year. In January, President Ranil Wickremesinghe said Sri Lanka’s economy could contract by 3.5% or 4.0% in 2023 after shrinking by 11% last year.

Inflation in South Asia is set to fall to 8.9% this year, and to below 7% in 2024, the World Bank said.

The World Bank also lowered its forecast for India’s economic growth in the current fiscal year that started on April 1 to 6.3% from 6.6% as it expects higher borrowing costs to hurt consumption.

Business

Donald Lu visits Finance Minister Aurangzeb at the World Bank headquarters.

Published

23 hours ago

Farwa

Wednesday saw Minister for Finance and Revenue Muhammad Aurangzeb meet US Assistant Secretary of State for South and Central Asian Affairs Donald Lu and Principal Deputy Assistant Secretary Elizabeth Horst.

The finance minister briefed US officials on Pakistan’s reform plan at the World Bank. Meeting both delegations decided to improve bilateral ties.

Meeting topics included alternative energy, agriculture, climate, and tech industry. Boosting the Pakistan-US economic partnership was another finance ministry priority.

With US officials, Pakistan’s Finance Minister Muhammad Aurangzeb addressed IT, agriculture, and other business potential.

Pakistan would collaborate with the US International Development Finance Corporation and Exim Bank, according to Muhammad Aurangzeb.

His name is Donald Lu.
Over 30 years of US government service for Lu as a foreign service officer.

What Pakistan calls the “cipher” dispute involves the American official. The Pakistan Tehreek-e-Insaf (PTI) founder claimed that a supposed official letter between Washington and Islamabad proved his ousting as PM was a US conspiracy.

Washington has strongly refuted Khan’s allegations.

The State Department’s top South and Central Asia diplomat is Donald Lu, assistant secretary of state.

Business

Huge investment potential exists in the telecom and IT sectors. Shaza Fatima

Published

2 days ago

Farwa

According to Shaza Fatima Khawaja, Minister of State for IT and Telecommunication, there are numerous investment prospects in Pakistan’s IT and telecom sectors.

She noted that the current administration is dedicated to fostering foreign investment in the nation, in line with the Prime Minister’s goal.

According to a news release, CEOs Wateen Adil Rashid and Muhammad Shahbaz Khan of Taavun (Pvt) Limited, who paid her a visit on Tuesday, spoke with Minister of State for IT and Telecommunication Shaza Fatima Khawaja.

She declared that the private sector would receive complete support because it is essential to growing our exports.

Regarding youngsters, she stated that they are our greatest asset and that efforts are being made to further their growth.

Sheikh Nahyan bin Mubarak Al Nahyan of the United Arab Emirates was thanked by Shaza Fatima for his particular interest in promoting additional investment in Pakistan’s telecom industry.

Business

WB pledges complete support for changes aimed at stabilizing Pakistan’s economy.

Published

2 days ago

Farwa

Federal Minister for Finance and Revenue, Muhammad Aurangzeb, met with President of the World Bank Group, Ajay Banga, according to a press release from the ministry of finance here. During the meeting, the minister discussed Pakistan’s progress under the nine-month Standby Arrangement (SBA) program as well as ongoing reforms in priority areas of taxation, energy, and privatization.

According to the statement, the minister also extended an invitation to the president to visit Pakistan, and both parties acknowledged the necessity of a rolling 10-year country framework plan.

The minister also talked on safeguarding Pakistan’s eligibility for concessional funding and future project pipeline during a meeting with Masatsugu Asakawa, President of the Asian Development Bank (ADB).

The chief executive officer of the US International Development Finance Corporation (DFC), Scott Nathan, also met with the minister of finance.

They discussed during the conference how DFC may increase its investments in Pakistan after resolving unresolved conflicts in a cooperative manner.

According to the minister, the government is supporting creative financing strategies to maximize PPP potential and private sector participation.

According to the statement, he gave his word that the government will do everything in its power to assist investment projects by both foreign and local businesses in Pakistan.