ISLAMABAD: On Wednesday, the World Bank (WB) forecasted a slow economic growth rate during the current fiscal year as the International Monetary Fund (IMF) programme was threatened by the subsidies given by the previous government. WB said that subsidies and price cuts create a burden on the fiscal budget, limiting finances for important projects.
According to Hans Timmer, Chief Economist WB in South Asia Region, the subsidies proved to be ineffective and unsustainable. He added that consumers should be charged the right prices and then redirected to people with lower economic status.
The WB explained that during the fiscal year 2022, the GDP growth would drop to 4.3 per cent compared to last year’s rate of 5.6pc. The statement added that in the fiscal year 2023, the GDP would further decrease to 4pc.
WB acknowledged that Pakistan followed the requirement of removing tax exemptions and increasing the taxes on petroleum products, but the political crisis and increasing prices pushed the government to provide relief on electricity and fuel.