ISLAMABAD: The World Bank raised its economic growth forecast for Pakistan, the region’s second-largest economy, for the current year ending in June, to 4.3% from 3.4%, while cutting it for India and the whole South Asian region on Wednesday, citing worsening supply bottlenecks and rising inflation risks caused by the Ukraine crisis.
The international lender lowered its growth estimate for India, the region’s largest economy, to 8% from 8.7% for the current fiscal year to March, 2023 and cut by a full percentage point the growth outlook for South Asia, excluding Afghanistan, to 6.6%.
In India, household consumption will be constrained by the incomplete recovery of the labour market from the pandemic and inflationary pressures, the bank said.
“High oil and food prices caused by the war in Ukraine will have a strong negative impact on peoples’ real incomes,” Hartwig Schafer, World Bank Vice President for South Asia, said in a statement.
The World Bank raised its growth forecast for Pakistan, and kept next year’s growth outlook unchanged at 4%.