According to a new World Bank report, Pakistan’s output is expected to contract 2.6pc in fiscal 2019/20, and 0.2pc in fiscal year 2020/2. GDP in South Asia is projected to contract by 2.7pc in 2020 according to the June 2020 Global Economic Prospects report.
This is because pandemic mitigation measures will hamper consumption and services and private investment will be chilled by uncertainty about the pandemic’s course.
India’s growth in fiscal year 2019/20 is estimated to have slowed to 4.2 pc and is forecast to contract by 3.2 pc in fiscal year 2020/21. The estimates from Bangladesh for the same time span were 1.6pc and 1pc, respectively.
“In economies like Pakistan, business confidence in both the manufacturing and service sectors has simultaneously fallen,” the report noted. Overall, the report does not enthuse about the ability of Pakistan or South Asia to deal with the adverse effects of the pandemic.
The report noted the pandemic will trigger a prolonged rise in poverty. This is particularly true given that South Asia has a high proportion of informal-sector workers employed. “Inadequate infrastructure, such as current major electricity access constraints, will magnify the negative impacts of lockdowns through low productivity and poor quality of services,” the report said.
Furthermore, continuing financial-market disruptions globally could add pressure to the financial sector ‘s vulnerable balance sheets in South Asia.
Extracted from City42 News