Millions More Pushed into Poverty
Inflation expectations highest for food and energy, growing by 7% YoY.
The World Bank has projected the economy to grow at 0.4% in 2023.
Around 3.9 million people will be pushed into poverty this year, according to the World Bank. The number isn’t alarming in wake of the recent rise in flour subsidies, and promises of free flour. The Food and Agriculture Organization has reported a decline in the global food price index for this month as well. The factors involved in these repercussions seem to have international reasonings, for instance, the Ukraine war, supply chain disruptions, etc. Yet, local elements are plenty ranging from tight monetary policy to low growth in various sectors.
As a result, the World Bank has projected the economy to grow at 0.4% in 2023. A sharp fall from the government’s estimate of 5% for the same time period. It is relevant to note that Pakistan’s rate of natural increase has averaged around 2 for the past few years. This points towards further deterioration in the country’s economic standing as compared to preceding years.
The SBP has also found a decrease of 4.1% in the Consumer Confidence Index as compared to the last wave of surveys. The incidence of people having a negative expectation for economic conditions has also been highly frequent. This survey, conducted in the first week of January, was succeeded by a rise in State Bank’s Policy Rate which stands at 21% at the moment.
Pakistan's government is controlling demand-side factors to influence inflation, whereas supply-side factors, such as LSM growth, export growth, etc., have received no such attention. The poor in the country are being directed to march to their doom, as the government pursues external solutions for its structural problems.
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GRAPHICS
Lower Middle Income Class Poverty Line US$3.65 (2017 PPP) per day per capita
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