A new report by the Asian Development Bank (ADB) on Thursday revealed that Pakistan is the most expensive nation in Asia.
What does the report state?
Pakistan is reported to have a 25 per cent inflation rate, which makes it have the highest living costs in Asia. Additionally, its economy may grow at a sluggish pace, the fourth-lowest pace of 1.9 per cent in the region after Myanmar, Azerbaijan and Nauru.
A local Pakistan newspaper reported that the ADB painted a rather worrisome future for the country. It projected a 15 per cent inflation rate for the next fiscal year, again the highest among 46 countries and a 2.8 per cent growth rate, the fifth lowest for FY 2024-25.
The Manila-based lending agency reported that such economic figures are a consequence of political uncertainty that affected macroeconomic policy-making, its large external financing requirements and weak external buffers. 
Pakistan has been in a stagflation phase for a prolonged period. The World Bank also reported that 10 million people might fall into the poverty trap because of any adverse shocks, while about 98 million people are already living a poor life in Pakistan.
Further, in the times to come, the nation is anticipated to continue to face challenges from substantial new external financing requirements and the rollover of old debt, exacerbated by tight global monetary conditions.
Pak’s approach
The State Bank of Pakistan (SBP) and the federal government had set the inflation target at 21 per cent for this fiscal year, but they are going to miss it despite inflicting huge losses in the shape of a 22 per cent interest rate.
The report added that “IMF support for a medium-term reform agenda would considerably improve market sentiment and catalyse affordable external financing from other sources”.
Finance Minister Muhammad Aurangzeb is set to meet the IMF Managing Director Kristalina Georgieva next week in Washington to request a new bailout package.
The World Bank has also expressed that Pakistan would miss both these budget targets, reported The Express Tribune. The government’s goal is to achieve a primary surplus of 0.4 per cent and an overall deficit of 7.5 per cent of GDP in FY2024, with both declining gradually in subsequent years.
Comments 1