About 10 million people at risk of slipping into poverty in Pakistan: World Bank

World Bank warns of rising poverty in Pakistan due to sluggish growth, high inflation, and missed macroeconomic targets.

The World Bank has painted a grim economic picture of Pakistan in its biannual report, cautioning that over 10 million more people are at risk of descending into poverty in the cash-strapped country. The Washington-based lender’s apprehension comes from a sluggish economic growth rate of 1.8% coupled with soaring inflation, a staggering 26% in the current fiscal year.

The World Bank’s biannual Pakistan Development Outlook report indicated that the country is set to miss almost all major macroeconomic targets. The international lender said the country is anticipated to fall short of its primary budget target, remaining in deficit for three consecutive years, contrary to the International Monetary Fund's stipulations mandating a surplus.

Sayed Murtaza Muzaffari, lead author of the report, said despite a board-based yet nascent economic recovery, poverty alleviation efforts remain insufficient. The economic growth is projected to stagnate at a paltry 1.8% while maintaining the poverty rate at around 40%, with approximately 98 million Pakistanis already grappling with poverty, the World Bank report said.

The report underlined the vulnerability of those hovering just above the poverty line, with 10 million individuals at risk of slipping into poverty. The report said that the poor and vulnerable are likely to have benefited from the windfall gain in agricultural output but these gains were offset by continued high inflation and limited wage growth in other sectors that employ many of the poor, such as construction, trade, and transportation.

The wages of daily labourers increased only 5% in nominal terms during the first quarter of this fiscal year when the inflation was above 30%, it said.

The persisting cost-of-living crisis coupled with rising transportation costs could potentially lead to an increase in out-of-school children and delayed medical treatments, particularly for worse-off families, warned the World Bank.

At the same time, it added that food security remains a concern in parts of the country.