- Growth predicted worse than target
The World Bank does not paint a flattering picture of Pakistan’s economy in its report on South Asia, predicting a mere 0.5 percent growth in the current fiscal year, as opposed to the official target of 2.5 percent, which is already anemic enough, well below the 4 percent averaged in the three years prior to 2018-19, which was the first year of the present PTI government. The World Bank said that the whole region had experienced an increase in poverty because of the covid-19 depression. One of the effects of the depression is the bottoming out of workers’ remittances, predicted to come down by 8.8 percent this year, thus contradicting the government claims that the remittances of the first couple of months of the fiscal showed that there was an economic turnaround.
Another worrisome indicator was the rising public debt, and thus the need to fund it by further loans. This would be unsustainable, and combined with collapsing remittances, would lead to the sort of balance of payments deficit that bedeviled the government at the beginning of its tenure. It seems that the government has put more effort into enhancing its optics, and not enough into actually improving the economy.
The government must remember that it cannot use the covid-19 pandemic as an excuse for its poor performance as an economic manager. The young people unable to get jobs in a sluggish economy, or their parents, who struggle to make ends meet, and count themselves lucky if they still have jobs, are not going to forgive the present government when election time comes around. Perhaps the report’s most damaging prediction is that the sluggish growth for the next five years, which would go well past the current tenure, in which less than three years are now left. While people generally vote with their pocketbooks, it is not as if the present government is brimming over with so many achievements that it can afford to treat the economy as casually as it does now.
