Islamabad, 5 May 2023 (TDI): Mumta Murthi, Vice President for Human Development at the World Bank, met the Finance Minister of Pakistan, Ishaq Dar, on her visit to Pakistan.
Mumta Murthi, along with the members of the World Bank Group, is on a visit to Pakistan. During her visit, she discussed the importance of investment in human capital.
According to the Ministry of Finance, the delegation also discussed policies and programs of the Government of Pakistan related to key areas of human development to uplift the masses and eliminate poverty in the country.
Pakistan’s Human Capital Index is 0.35, which is below the average of 0.41 for Pakistan. This has been set back further by the recent floods.
The Human Capital Index (HCI) quantiﬁes the contribution of health and education to the productivity of the next generation of workers.
Countries are using HCI to assess how much income they forego because of human capital gaps and how much faster they can turn these losses into gains if they act now.
World Bank Report on Pakistan, April 2023
The World Bank Report on Pakistan, “Pakistan Development Update: Recent Economic Developments, Outlook, and Risks,” was released in April this year.
According to the report, Pakistan’s economy is expected to grow by only 0.4 percent in the current fiscal year ending June 2023.
Pakistan suffered devastating floods in the year 2022 and increased global commodity prices following Ukraine Russia war. The rapid crisis not only shook the world but also affected the already indebted economy of Pakistan.
The report highlights key issues facing the economy. Firstly, an inconsistent policy response involving monetary tightening. Secondly, an informal exchange rate cap saw the depletion of foreign exchange reserves. Thirdly, undermined progress with planned fiscal consolidation.
Furthermore, the delays in IMF-EFF 9th program review and the recent course correction resulted in an increase in energy tariffs, reduced subsidy spending, and allowed the exchange rate to float, lending to a sharp depreciation.
The report also predicts an increase in the lower middle-income poverty rate. With slowing economic activity, the lower middle-income poverty rate is expected to increase to 37.2 percent in FY23.
The report projects inflation to rise to 29.5 percent in FY23 due to higher energy and food prices but will moderate as global inflationary pressure decrease.
According to the report, the reform agenda, if implemented with strong political ownership and adequate external support, the output growth could gradually recover in FY24 and FY25.