Islamabad: Around 34 per cent of Pakistan's population lives on just $3.2 or Rs 588 a day income, the World Bank has said as the cash-strapped country's new Finance Minister Miftah Isamil faces uphill tasks of containing rising inflation and navigating through one of the worst external sector crisis.
The Pakistan Development Update - the biannual report issued by the Washington-based lender - said that soaring inflation disproportionately affected poor and vulnerable households that spend a relatively larger share of their budget on food and energy, the Express Tribune Newspaper reported on Wednesday.
The poor spend around 50 per cent of their total consumption on food items, the World Bank said in the report released on Tuesday, the day Prime Minister Shehbaz Sharif appointed Isamil as the finance minister.
The report pointed out that Pakistan's key indicators were further deteriorating in the current fiscal year, seeking urgent measures to tighten the fiscal belt for ensuring debt sustainability. Poverty measured at the lower middle-income class poverty line of $3.2 Purchasing Power Parity line of 2011 per day was estimated at 34 per cent in the last fiscal year. The ratio was 37 per cent in the preceding year. But despite a nominal reduction, the percentage was significantly higher and it would be a constraint for the new government that was assigned with an uphill task to ensure economic viability of the country, the report said.
Ismail, along with Dr Ayesha Ghaus Pasha, who has been assigned the portfolio of minister of state for finance would leave for Washington on Wednesday to have their first interaction with the authorities at the US Treasury Department, the International Monetary Fund and the World Bank.
I am hopeful that I will be able to convince the IMF to revive the programme on terms that also take into account harsh ground realities in Pakistan, Ismail was quoted as saying. His one of the most important meetings would be at the US Treasury Department, as the country seeks to repair ties with the world's largest economy, damaged by immature public statements by former prime minister Imran Khan and former foreign affairs minister Shah Mahmood Qureshi.
But the World Bank's Pakistan Development Update report tells what lies ahead for the new finance minister. It cautioned that rising food and energy inflation was expected to diminish the real purchasing power of households, disproportionately affecting poor and vulnerable households that spent a larger share of their budget on these items.