Pak, poverty, pressure

In the absence of higher social spending in Pakistan, the lower middle-income poverty rate is expected to increase to 37.2 per cent in 2022-23, according to the World Bank report on the macro poverty outlook for Pakistan.World Bank sees that poverty in Pakistan will inevitably increase with pressures from weak labour markets and high inflation, warning that further delays in external financing, policy slippages, and political uncertainty pose significant risks to the macro poverty outlook. Given poor households that depend on agriculture and small-scale manufacturing, and construction activity will remain vulnerable to economic and climate shocks.Official remittance inflows also fell by 11.1 per cent, partly due to the exchange rate cap that made informal non-banking channels preferable. Any decline in overall remittances would reduce households’ capacity to cope with economic shocks, adding pressure on poverty, Dawn wrote quoting the report.The report says Pakistan’s economy is under stress with low foreign reserves and high inflation. Activity has fallen with policy tightening, flood impacts, import controls, increased borrowing and fuel costs, low confidence, protracted policy and political uncertainty.Despite some projected recovery, growth is expected to remain below potential in the medium term