World Bank predicts modest growth for Pakistan in 2024 report
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The World Bank has released its latest Pakistan Development Update Report, painting a cautiously optimistic yet challenging economic outlook for the country.
According to the report, Pakistan's economic growth rate is expected to hover around 2.7 percent for the current fiscal year, with a slight improvement to 3.1 percent projected for the next year.
In a notable development, Pakistan’s current account balance is anticipated to show a surplus for the first time in 15 years. The World Bank estimates the current account deficit to remain at just 0.2 percent of GDP this year and shift into a minor surplus of -0.5 percent in the next fiscal year.
However, the budgetary situation remains precarious. The report projects the current fiscal year’s budget deficit to be around 6.8 percent of GDP, while next year's may reduce slightly to 6.2 percent. Meanwhile, Pakistan's debt burden is projected to climb from 74.6 percent of GDP this year to a staggering 77 percent in the coming year.
Inflation continues to pose a significant risk, with rates expected to fluctuate between 5 and 10 percent. The poverty rate is forecast to hover around 25.4 percent this year, with a marginal decline to 24.8 percent next year, signaling limited improvement in living conditions for the lower-income population.
The World Bank also raised alarms over Pakistan’s structural economic weaknesses. It highlighted that maintaining macroeconomic stability remains a persistent challenge, and emphasized the need for sustained commitment to economic reforms. The report identifies Pakistan’s unfair tax system and wasteful public spending as key hurdles to growth, along with the growing circular debt in the energy sector.
It further cautioned that a tight monetary policy is expected in the near term, necessary to control inflation and maintain economic discipline, but it may slow down economic activity temporarily.
Overall, the World Bank underscores that while some indicators show signs of recovery, Pakistan’s economy still faces substantial risks unless critical structural reforms are urgently addressed.