By Sardar Khan Niazi
The world is still to recover in any sustainable way from serious economic challenges. Covid-19 pandemic variants, supply shock, climate change crisis, and lack of meaningful multilateralism have been some of the main reasons for the delay in both global economic recovery and putting it on a sustainable path.
World Bank in its latest report highlights the difficult economic outlook for the current year. Global growth is likely to decelerate sharply to 1.7 percent – the third weakest pace of growth in nearly three decades.
This is 1.3 percentage points below previous forecasts. It led to policy tightening aimed at containing inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine.
In the particular case of Pakistan, the economic outlook remains very problematic, with the economic growth rate for fiscal year (FY) 2022/23 forecast at only 2 percent, which becomes only slightly better, as per the forecasted number, in FY2023/24 at 3.2 percent.
Global economic challenges are particularly worrisome for developing countries. As a result, the convergence of average incomes between poor and rich countries has stalled. Worse, it might not soon return, given the damage already done and likely to persist in the years ahead.
An obvious danger now is that of waves of defaults in over-indebted developing countries. Taken together, these shocks will cause long-lasting effects, in many vulnerable places.
Therefore, given the gravity of the economic challenges at hand, it is important to launch a mission-oriented, purpose-driven, effort at the global level to tackle the neoliberal assault, and climate change crisis, so that the global economy is put on a much-needed strong footing.
IMF managing director, Kristalina Georgieva has raised serious concerns about the global economic outlook. The recession will hit a third of the world this year. IMF chief warns that this year, the recession will hit a third of the global economy. The world faces a tougher year in 2023 than the previous 12 months. The US, EU, and China are all slowing simultaneously.
Global real GDP growth is likely to slow from 3.1 percent in 2022 to 2.0 percent in 2023. A painful recession will hit hard the developed markets within the Eurozone as well as a light and short recession in the US.
The most evident threats to Pakistan are the agonizing debt burden, persistent political crises, undefined security environment, fears of bankruptcy, increasing inflation, energy shortage, dearth of basic infrastructure, population eruption, undemocratic values, the extraordinary flood, water and food ambiguity, and corruption.
Unfortunately, the politicians, who are supposed to deal with these problems, are busy with political fights. The ongoing situation is extremely bad. The ruling elite does not know morality. In the Democracy Index 2021, Pakistan stands in 104th place among 171 nations.
Political stability and insightful leadership are the prime factors responsible for changing the country’s plight. Political leadership must think outside the box. They should prefer the interests of the country to their own political and economic interests.
Economic prosperity is the sole factor that propels a country to the status of a developed nation. Equal development plans adopted for all the people of various provinces can ensure internal peace and harmony.
Good governance can guarantee a reliable and responsive health and education system in the country. Aside from the above-mentioned reforms paving the way to an ideal developed nation, the masses should be educated to be committed to playing their roles to the best of their abilities, rather than only accusing politicians.
Indicators such as commodity prices, shipping rates, and inflation prospects all point to weaker price growth. While inflation will trend lower over 2023, it is unlikely to hit central bank targets over the next nine-to-12 months in most economies.
