THE World Bank, in its latest Global Economic Prospects Report, has painted a dimmer economic picture for Pakistan saying its economy will grow by mere two percent during the next fiscal year. It points out that the lasting effects of August 2022 floods, along with policy uncertainty and limited foreign exchange reserves to pay for imports of food, energy and immediate inputs, have depressed activity with industrial production contracting by about twenty five percent.
The report by the World Bank underscores the need for urgent action. Two or three percent growth is insufficient to address the country’s pressing challenges. To meet the rising demands of a growing population, reduce poverty and improve living standards, we must achieve robust and inclusive growth. A higher growth trajectory is essential for job creation, attracting investment and addressing the persistent issues of income inequality and social disparity that plague the country. We must prioritize reducing the fiscal deficit through measures such as broadening the tax base, enhancing tax collection efficiency and curbing expenditure. Implementing targeted social safety nets can help protect vulnerable populations during this transition, ensuring that the burden of economic adjustment is distributed equitably. Then, efforts to diversify and enhance the competitiveness of our export sector are essential. A comprehensive export promotion strategy, coupled with investment in quality infrastructure and skill development, can help revitalize the export industry and create new avenues for growth. Especially we have to focus on the small and medium industries. Initiatives such as credit guarantee schemes and digital banking solutions can empower the SMEs and enable them to contribute more significantly to the economy. At the same time, we have to uplift the agriculture sector to domestically meet all our food-related requirements. The inefficiency of our energy sector can no longer be ignored. By investing in renewable energy resources, we can reduce reliance on expensive imported fuel as well as effectively deal with the issue of circular debt which is swelling each month. This moment calls for political stability, unity, determination and bold decision-making to steer the nation in the right direction.