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Report on the 2024 global economic outlook by the United Nations meticulously examines Pakistan’s economic landscape, GDP growth forecast is a modest 2 percent in 2024, followed by a slightly improved 2.4 percent in 2025.
Despite these predictions, the report highlights worrisome indicators, emphasizing latent risks and structural vulnerabilities within the worldwide economy.
Lower-middle-income categorization is assigned to major South Asian economies like India, Pakistan, and Bangladesh, each grappling with persistent challenges, especially in the realm of food security.
In 2023, both Bangladesh and Pakistan witnessed an upswing in the number of people experiencing acute food insecurity, in contrast to Sri Lanka, where the situation ameliorated. Afghanistan, however, remains the most severely impacted, with 46 percent of its population facing acute food insecurity.
Delving into Pakistan’s economic specifics, the report discloses disconcerting statistics. The inflation rate soared to 39.18 percent in 2023, prompting the State Bank of Pakistan to uphold a record-high policy rate of 22 percent since June 2023. Additionally, the country grappled with a currency depreciation exceeding 20 percent during the same year.
Pakistan confronts substantial sovereign debt and an unsustainable debt-servicing burden. In 2023, external debt constituted 36.5 percent of the country’s nominal GDP, marking a significant escalation from the preceding year. The government debt-to-GDP ratio reached 89 percent in 2022, underscoring the complexities of managing fiscal responsibilities.
Real effective exchange rates, a comprehensive metric, declined from 88 in 2022 to 72 percent in 2023, depicting the economic challenges confronting Pakistan.
The World Economic Situation and Prospects report for 2024 presents a nuanced perspective on Pakistan’s economic trajectory, balancing modest growth projections with an array of challenges, including inflationary pressures, currency depreciation, and elevated levels of sovereign debt.