World Bank Report Highlights Risks Posed by COVID to Pakistan’s Economy

ISLAMABAD: A new World Bank report released on Wednesday termed new waves of infection, the emergence of vaccine-resistant strains coupled with setbacks in mass vaccinations as major risks to the economic outlook of Pakistan.

Output growth is expected to recover gradually over the medium-term, averaging 2.2 percent over fiscal years 2021-2023, mostly due to contributions from private consumption, the report said.

However, sectors that employ the poorest, such as agriculture, are expected to remain weak, and therefore poverty is likely to remain high.

Though fiscal consolidation efforts are expected to resume, the deficit is projected to remain elevated at 8.3pc of GDP in the fiscal year 2021, partly due to the settlement of arrears in the power sector, the report underlines.

It goes on to add the containment measures adopted in response to the Covid-19 led to a collapse in economic activity during the final quarter of the fiscal year 2020, and as a result, GDP is estimated to have contracted by 1.5pc in the fiscal year 2020. Over the first half of the fiscal year 2020-21, there have been signs of a fragile recovery.

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