Rising poverty in Pakistan amid economic challenges
According to a recent report by the World Bank, Pakistan is grappling with a severe poverty crisis, with a staggering 40% of its population living below the poverty line. This alarming statistic has prompted the World Bank to urge Pakistan to reconsider its policy decisions, which it believes have been influenced by powerful vested interests within the military, political, and business spheres.
The timing of this warning is crucial, as Pakistan is on the brink of a new election cycle. The World Bank’s recommendation includes imposing taxes on the agriculture and real estate sectors, aiming for a significant fiscal adjustment of over seven percent of the country’s economy.
The report reveals that poverty in Pakistan has surged to 39.4% in the last fiscal year, with an additional 12.5 million people falling into poverty due to adverse economic conditions. This means that a staggering 95 million Pakistanis are now living in poverty.
The World Bank has also outlined priority areas for reforms in the next government, which include addressing low human development, unsustainable fiscal practices, overregulation in the private sector, and challenges in the agriculture and energy sectors. They propose measures to increase the tax-to-GDP ratio by five percent and reduce expenditures by 2.7% of GDP to steer the economy toward a more sustainable path.
The World Bank’s lead country economist, Tobias Haque, expressed deep concern about Pakistan’s economic situation and stressed the need for significant policy shifts to address the country’s economic and human development crises. This report highlights the urgent need for Pakistan to address its poverty crisis and make substantial policy changes to achieve economic stability.
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