ISLAMABAD: Pakistan’s growth forecast for the fiscal year 2022-23 would slow down to two percent owing to the impact of floods and political uncertainty, the World Bank said on Tuesday in an annual report on the global economic outlook. 

In a similar economic outlook report it released in June 2021, the World Bank said Pakistan was expected to record a GDP rate of 4 percent in the 2022-2023 fiscal year. In its latest report titled ‘Global Economics Outlook’, the World Bank cut Pakistan’s growth by two percent, saying that Islamabad faces numerous economic challenges due to policy and political uncertainties and the impact of colossal floods from last year.

The Washington-based lender said barring India, South Asia was expected to underperform compared to its pre-pandemic GDP rate. “This is mainly due to weak growth in Pakistan, which is projected at 2.0 percent in FY2022/23, half the pace that was anticipated last June,” the report stated. 

The World Bank further said if Pakistan implements policy measures to stabilize macroeconomic conditions, inflation in the country dissipates and it undertakes rebuilding measures to cope with the devastation wreaked by floods, Pakistan’s GDP was expected to grow to 3.2 percent in FY2023/24. 

The global lender warned Pakistan and Sri Lanka to “tighten policies more rapidly” in pursuit of macroeconomic stability.

As far as the global economy is concerned, the World Bank said it would come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — the United States, Europe and China. 

The international lender slashed its forecast for global growth this year by nearly half, to just 1.7 percent, from its previous projection of 3 percent. If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.