Topics
Pakistan  | world economy | World Bank
ANI  Last Updated at April 14, 2022 11:16 IST
https://mybs.in/2aukSwL

Citing the additional burden on the budget put by the last-ditch energy subsidies by the outgoing Imran Khan government, the on Wednesday reduced Pakistan’s economic growth rate forecast for the current fiscal year by almost one per cent, reported local media.

“The financing of the price cuts or subsidies can create an additional burden on the fiscal budget, threaten the ongoing programme with the Monetary Fund (IMF), and limit the use of the fiscal budget on other, more productive projects”, the Dawn newspaper quoted the as saying ahead of the IMF-WB Annual Spring Meetings beginning early next week.


Terming these subsidies as 'unsustainable and ineffective', the bank's Chief Economist for South Asia Region Hans Timmer advocated that the right prices should be charged to consumers and redistributed to poor households.

"While these measures can help reduce fluctuations in domestic prices, also constitute a direct burden or hidden liability on the government's budget, which could increase fiscal vulnerabilities going forward. GDP growth is expected to slow to 4.3 per cent in FY22 (against 5.6 per cent last year) and to 4 per cent in FY23," said the bank.

The bank noted that had earlier followed its agreement with the IMF to remove tax exemptions and increase the tax on fuels. However, rising energy prices domestically and challenges from political opposition forced the government to offer electricity and fuel price relief in February, according to the media outlet.

Noting that energy subsidies are one of Pakistan's challenges in the current environment, the bank said that inflation will reach double digits in the country before subsiding in 2023.
Further, accumulated government debt in during the COVID-19 pandemic may lead to fiscal consolidation measures as general government debt has reached over 70 per cent of GDP, reported the media outlet.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor
PREVIOUS STORY
NEXT STORY
Copyrights © 2022 Business Standard Private Ltd. All rights reserved.
Business Standard
Upgrade To Premium Services
Business Standard is happy to inform you of the launch of "Business Standard Premium Services"
As a premium subscriber you get an across device unfettered access to a range of services which include:
Business Standard
Premium Services
In Partnership with Fis Logo
Dear Guest,
Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard

source

You May Also Like

How to watch the 2022 U-17 Women’s World Cup draw in India?

The 2022 U-17 Women’s World Cup draw will decide the path from…

The best and worst airlines for flight cancellations – The Indian Express

Passengers flying with Virgin Australia and Dutch carrier KLM are suffering some…

Team USA swimmer Anita Alvarez faints in pool during 2022 FINA World Championships – CBS Sports

Play Now Football Pick’em Play Now Fantasy Football Top 5 WR Debates…

WHO chief blames racism for greater focus on Ukraine than Ethiopia – The Guardian

Tedros Adhanom Ghebreyesus says world ‘is not treating the human race the…