The World Bank has painted a bleak picture of Pakistani economy in its latest prediction. The World Bank outlook pointed out that economic growth will remain weak, the inflation will be high and poverty will increase. This economic outlook is not good news for both the PTI government and poor masses.
The World Bank report is a timely reminder for the economic managers to take measures to overcome the current economic crisis. It is a reminder that economic crisis is not yet over. The government needs to take necessary measures and policy decisions to address the economic problems. This economic outlook is not good news for both the PTI government and poor masses.
The GDP growth will remain low at 0.5% in 2021. Real GDP growth (at factor cost) is estimated to have declined from 1.9 percent in financial year 2019 to -1.5 percent in financial year 2020 (the government had estimated that the GDP growth stood at -0.4 percent for FY 2020) the first contraction in decades.
Pakistan’s economy experienced first negative growth in its GDP since 1952. This figure alone is enough to explain the seriousness of the economic crisis we are going through. Given anemic growth projections in the near term, poverty is expected to worsen.
PTI government wants to provide jobs and economic opportunities through the growth in private sector. The private sector cannot generate enough jobs to meet the needs of growing labour market in the middle of an economic crisis. With this weak economic growth rate, the unemployment will rise. Fewer people will be able to get jobs.
The low growth rate also means that poverty will increase as wages and incomes of working people will be further depressed. There will be hardly any real growth in the wages and incomes under the present economic circumstances. The businesses are not expanding. Both the government and private sector are not making required investment to speed up the economic recovery.
Vulnerable households rely heavily on jobs in the services sector, and the projected weak service growth is likely to be insufficient to reverse the higher poverty rates precipitated by the pandemic says the World Bank.
Pakistani economy is likely to face low GDP growth rate and high inflation in next two years. It is a deadly combination for the poor population. It hurts the poor badly and pushes more people into poverty. Low economic growth rate means fewer jobs, less economic opportunities and fall in the production and incomes.
The high unemployment rate means less incomes and falling purchasing power. The falling purchasing power then means less consumption. The less consumption means less demand for products. This in return reduced the industrial production. So that is really what is happening right now in Pakistan.
The shrinking economy is forcing most of the people to tighten their belts and wallets. The government needs to break this cycle.
The higher inflation means poor people have to buy expensive products and food with meagre incomes. It means less food for poor. It means fewer education opportunities for poor families. It means a lost generation that has missed out on education, job opportunities, and other chances in life.
The poor people find it hard to buy expensive food, medicines, groceries and pay utilities bills. They forced to make choice between food and education of their children. They forced to make choice to buy medicine or wheat flour. Their life becomes miserable.
In last two years, 20 million people have fallen below the poverty line. Now Pakistan has around 80 million people living below the poverty line and millions are living in abject poverty and destitute. Nearly 18 million people are now unemployed.
The inflation stands at 9%. The food inflation stands at 14%. The life has become even more miserable in last two years.
The problem of poverty should be a cause for great concern as it affects the social and economic environment of the country. The life of people in poverty is very harsh. They have problems having three meals a day. The main cause of poverty is unemployment or having low-paying jobs because of a lack of education or skills. Therefore, for those poor families to finance their children’s education, more help to prepare them for the work field is required.
To build a harmonious society in this regard, it is necessary to start early. Family conflicts, child neglect and elderly neglect are cases caused by the problem of poverty. The best way to eliminate poverty is to provide the right resources for poor families.
Poverty is a serious problem. When a society’s wealth gap is very wide, there will be a great impact on the well-being of a society. I hope poor families also take the initiative to write to the authorities for help. The Government and people from all walks of life need to do more for them and help them to get rid of poverty with the help and encouragement from everyone.
Poverty is linked with negative conditions such as substandard housing, homelessness, inadequate nutrition and food insecurity, inadequate child care, lack of access to health care, unsafe neighborhoods, and under resourced schools which adversely impact our nation’s children.
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