Pakistan has faced economic challenges for years, while India has surged ahead to become the world’s fastest-growing major economy, as per a recent report. Following the Covid pandemic, the two neighboring countries experienced contrasting economic trajectories. Pakistan initially saw a 6% GDP growth in 2022, but this growth was short-lived, with the economy nearly stalling by 2023. In contrast, India maintained robust growth above 6%, positioning itself as a standout in the global economy.
The economic issues in Pakistan have been acknowledged even within the country’s power circles. Lt-Gen Sarfraz Ahmed, the national coordinator of the Special Investment Facilitation Council, openly admitted that Pakistan lacked a growth plan and had mismanaged its fiscal situation. The country’s economic crisis is exemplified by soaring inflation, reaching 37.97% between 2022 and 2023, the highest in three decades. This inflation has severely impacted many, making it challenging for families to afford basic necessities due to stagnant salaries amidst rising prices.
The World Bank reported that Pakistan’s inflation surge pushed an additional 13 million people into poverty, leading to a rise in the poverty rate from 21.9% to 25.3% by 2023-2024. This translates to one in four Pakistanis living below the poverty line, with nearly 45% of the population facing poverty under a higher global threshold. In comparison, India experienced lower inflation rates, mainly influenced by global oil and supply issues, with inflation dropping to around 5-6% by 2023.
India’s efforts to control food prices resulted in a further decline in inflation by 2024. By late 2023, India’s retail inflation was below 5%, contrasting starkly with Pakistan, where consumers faced significantly higher price hikes. The World Bank noted a substantial reduction in extreme poverty in India, with the proportion of people living on less than $4 a day plummeting from 16% to just 2.3% by 2023.
