Pakistan’s Economic Challenges and Poverty Rate

According to the report, the country’s poverty rate is expected to remain high, with 40.5% of the population living below the poverty line, despite the growth.

The report mentioned several challenges facing Pakistan’s economy, including a high population growth rate, low tax revenue, and a struggling energy sector.

The energy sector’s circular debt has increased to 2600 billion rupees, posing a major threat to the country’s economic stability. To address these challenges, the World Bank recommends that Pakistan implement tough economic policies, including reducing subsidies, increasing tax revenue, and promoting exports.

The report also identified the need for structural reforms in the energy sector to address the circular debt issue and ensure sustainable economic growth.

Moreover, the World Bank predicts that Pakistan’s GDP growth rate will increase to 3.2% in the next fiscal year, and the poverty rate is expected to decline to 39% in the next two years.

Pakistan’s economy is improving, says Muhammad Aurangzeb

The report came after the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb said Pakistan’s economy is moving in the right direction and improving.

He said that the government’s role was not to do business but to facilitate the private sector. He welcomed Saudi Arabian delegates to promote trade and investment through a Business-to-Business (B2B) model.

The minister cited significant progress in macroeconomic stability over the past 12-14 months. Pakistan achieved a primary surplus, reduced its current account deficit to less than $1 billion, stabilized its currency, and increased foreign exchange reserves to cover two months of imports.

Muhammad Aurangzeb noted that these gains have been consolidated in the current fiscal year, with strong remittances, export growth, and a reduction in inflation from 38% to 6.9%. The decrease in policy rates has also benefited businesses.