South Asia Macro Poverty Outlook Country-by-country Analysis and Projections for the Developing World Annual Meetings 2024 © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclu- sions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. South Asia Afghanistan Maldives Bangladesh Nepal Bhutan Pakistan India Sri Lanka MPO 1 Oct 24 wholesale and retail trade and trans- portation. However, the education sub- AFGHANISTAN Key conditions and sector declined by 9.4 percent, and the health and social services sub-sector de- challenges clined by 3.1 percent. On the demand side, private consumption increased by Afghanistan faces numerous socio-eco- 6.2 percent, with government consump- nomic challenges since the Taliban's re- tion contributing modestly at 1.1 percent. turn to power, including a sharp decline However, overall growth in aggregate de- Afghanistan's economy grew by 2.7 per- in international aid, frozen foreign re- mand was constrained by the decline in cent in FY2023-24, partially recovering serves, persistent deflation, growing trade investment and exports. deficit, restrictive laws particularly affect- Headline inflation fell in April 2023 and from a 27 percent contraction following ing women’s rights, and persistently low remained negative throughout the Afghan the Taliban's takeover. Growth in agricul- levels of human capital. Private consump- fiscal year. Domestic prices declined by 7.7 ture, industry, and services contributed tion remains constrained, and nearly half percent on average in FY2023-24. Core in- to the recovery. Humanitarian aid and in- of the population lives in poverty with flation, excluding volatile food and energy ward remittances supported aggregate de- fewer quality jobs and increased unem- prices, was also negative, falling by about 3 ployment, particularly affecting youth percent by the end of the FY in March 2024. mand. However, the outlook remains sub- and women. The Interim Taliban Admin- Declining prices, notably in food, have dued, with high downside risks due to istration (ITA) has strengthened domestic supported a progressive improvement in persistent deflation, a trade deficit, and revenue mobilization efforts, but progress Afghan households’ self-reported welfare. restrictive laws, particularly affecting is insufficient to offset the reduction in According to the latest estimates (Spring external support. Afghanistan's underde- 2023), monetary poverty is at 48.3 percent, women's rights. Afghanistan's long-term veloped infrastructure, particularly in en- a 4-percentage point decline compared to economic prospects depend on internal ergy and transportation, hinders industri- the same period in 2020. Poverty in urban policy reforms and external aid. al and commercial productivity, especial- areas remains on an upward trend, reflect- ly in rural areas. ing the lack of quality job opportunities while improvement in the security situa- tion, better access to markets, and a good agriculture season supported a decline in Recent developments poverty in rural areas. Afghan households have coped with the crisis by increasing In FY2023-24, Afghanistan's GDP began their labor supply. However, a weak labor to expand. Agriculture expanded by 2.1 demand has caused a doubling of unem- percent and the industrial sector by 2.6 ployment and a 25 percent increase in un- percent, supported by a halving of the deremployment between 2020 and 2023. business receipt tax (BRT) for industries Afghan women continue to suffer the conse- and lower tariffs on raw and semi-raw quences of restrictive policies. Between 2022 materials. The services sector grew by 2.3 and 2023, girls’ secondary school enroll- percent, with notable contributions from ment collapsed from 14 percent to 3 percent FIGURE 1 Afghanistan / Real GDP growth and contributions FIGURE 2 Afghanistan / The country is facing deflation to real GDP growth Percent, percentage points Percent 10 20 5 15 0 10 -5 5 -10 0 -15 -5 -20 Headline inflation -25 -10 Core inflation 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Agriculture Industry Services -15 Taxes on G&S Real GDP Aug-21 Feb-22 Aug-22 Feb-23 Aug-23 Feb-24 Sources: National Statistic and Information Authority (NSIA) and World Bank staff. Sources: NSIA and World Bank staff projections. MPO 2 Oct 24 due to the ban on secondary education. The fiscal deficit is expected to narrow While more women have entered the labor to 0.7 percent in FY2024-25, with a bal- force to support their households' liveli- Outlook anced budget projected for FY2025-26 hoods compared to 2020, limited mobility and FY2026-27. Revenue collection has and other restrictions largely reduce their Economic activity is expected to grow mod- improved during the first four months employment opportunities to home pro- estly over the medium term, averaging 2.75 of FY2024-25, totaling AFN 69.7 billion, duction in the manufacturing sector. The percent annually from 2024 to 2026, with marking an 11 percent increase from Morality Law recently promulgated, if ful- agriculture growing faster than the rest of the previous year, primarily driven by ly enforced, could further restrict women's the economy Domestic prices are expected higher non-tax revenues. With borrowing socio-economic inclusion and the coun- to stabilize in the second half of FY2023-24, constraints, the revenue increase is ex- try’s development prospects. with inflation turning positive. pected to be matched by a corresponding Afghanistan's current account deficit in- With projected GDP growth barely at par rise in expenditure. creased to 13.5 percent of GDP in with that of the population, per capita Afghanistan’s economic outlook faces FY2023-24, driven by a growing trade GDP is expected to stagnate and poverty major risks, including political instability deficit and declining foreign aid. Despite to remain above 40 percent. Moreover, vul- that weakens investor confidence and increased remittance inflows, total income nerability to falling into poverty because of long-term planning. The country's isola- from abroad declined by approximately shocks remains a concern, as does unem- tion and lack of international recogni- two percentage points of GDP, falling to ployment and job quality challenges. tion limit access to foreign aid, invest- 33.7 percent. Financing the current ac- The current account deficit in Afghanistan ment, and trade, slowing its economic count deficit has been challenging due to is projected to increase to 17.7 percent of recovery. A high current account deficit limited foreign direct investment and lim- GDP in the forecast period, up from 13.5 strains foreign reserves, and with limited ited borrowing capacity. percent in FY2023-24 driven by a high financial options, the central bank strug- Despite improvements in domestic rev- trade deficit accounting for 40 percent of gles to manage currency stability, which enue mobilization, the fiscal deficit GDP. Exports of goods and services are could lead to inflation. The ITA relies (cash-basis) widened to 1.4 percent of expected to decline by two percentage heavily on customs duties and non-tax GDP in FY2023-24. Operating expendi- points, stabilizing around 10 percent of revenues but falling exports and lower tures increased by 0.3 percentage points GDP, while imports are expected to tax income make it harder to balance to 15.6 percent of GDP, while develop- slightly exceed 50 percent of GDP. Total the budget. The agriculture sector, which ment expenditures grew from 0.8 per- income from abroad is expected to de- provides a livelihood for 40 percent of cent of GDP in FY2022-23 to 1.3 percent cline to around 22 percent of GDP, and fi- the population, remains vulnerable to cli- in FY2023-24. The fiscal deficit was po- nancing of the current account deficit will mate change and weather shocks, leading tentially financed by a reduction in de- remain a challenge, even more so in a to potentially severe impacts on poverty posits at the central bank. context of declining aid. and food security. MPO 3 Oct 24 from UN Least Developed Country (LDC) status in 2026. BANGLADESH Key conditions and challenges Table 1 2023 Recent developments On August 8, 2024, an interim gov- Population, million 169.4 ernment took office following the res- Prior to the interim government taking GDP, current US$ billion 414.4 ignation of the former Prime Minister. office, the turmoil disrupted economic GDP per capita, current US$ 2445.6 The timing of the next election remains activity, particularly in the industrial and a 5.0 International poverty rate ($2.15) uncertain. The interim government will service sectors. a 30.0 need to address persistent high infla- Before the transition, real GDP grew by Lower middle-income poverty rate ($3.65) a 74.1 tion, declining reserves, and elevated fi- 5.2 percent in FY24. On the supply side, Upper middle-income poverty rate ($6.85) Gini index a 33.4 nancial sector vulnerabilities to stabi- GDP growth was primarily driven by School enrollment, primary (% gross) b 117.7 lize the economy. Despite disruptions in industry, which expanded by 5.8 per- b 73.7 economic activity, the transition is an cent—lower than the decadal average of Life expectancy at birth, years opportunity to implement a wide-rang- 9.5 percent, impacted by energy short- Total GHG emissions (mtCO2e) 260.7 ing reform agenda. ages, import restrictions, and monetary Source: WDI, Macro Poverty Outlook, and official data. Deterioration in labor market conditions tightening. Services growth also slowed a/ Most recent value (2022), 2017 PPPs. b/ Most recent WDI value (2022). may have contributed to people’s discon- to 5.3 percent as domestic purchasing tent. Labor force participation declined power declined due to persistent in- from 61.2 in 2022 to 60.9 in 2023 and flation. Agricultural growth remained Real GDP growth is expected to slow reached 59.9 percent in the first half of modest at 3.3 percent. 2024. Employment has also reduced, par- The current account deficit almost halved from 5.2 percent in FY24 to 4.0 percent ticularly in 2024 (1.2 percentage points to US$6.5 billion (1.4 percent of GDP) in FY25, driven by subdued investment variation), and the unemployment rate in FY24 from US$11.6 billion in FY23, and industrial growth in the aftermath of remained almost stagnant at around 3.5 as the trade deficit improved, and remit- student-led protests and persistent social percent. This dynamic is mainly driven tance inflows grew by 10.7 percent. In by discouraged workers leaving the mar- May 2024, Bangladesh Bank adopted a grievances. Extreme poverty is projected ket as they cannot find jobs. crawling peg exchange rate system and to have increased to 6.1 percent in FY24, Comprehensive reforms to create more devalued the exchange rate. As of Sep- and inequality to increase over one Gini jobs, address financial sector vulnera- tember 8, foreign exchange reserves de- index point. Job creation, revenue mobi- bilities, strengthen public sector perfor- clined by US$2.3 billion since June 2024 lization, and financial sector reforms are mance, and improve revenue mobiliza- to reach US$19.4 billion, (3.2 months of tion will be critical to support growth. import coverage). key priorities for robust growth in the In the medium term, Bangladesh will Inflation remained elevated, averaging 9.7 medium to long term and to support the need to improve governance, boost hu- percent in FY24, due to high food and im- new poor to improve their welfare and be man capital, address climate risks and port prices. In response, the policy rate was lifted out of poverty. diversify exports to counter reduced raised by 100 basis points in FY25 to 9.5 market access following the graduation percent (cumulatively by 425 basis points FIGURE 1 Bangladesh / Real GDP growth and contributions FIGURE 2 Bangladesh / Actual and projected poverty rates to real GDP growth and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 15 100 250000 90 10 80 200000 70 5 60 150000 50 0 40 100000 30 -5 20 50000 -10 10 2000 2003 2006 2009 2012 2015 2018 2021 2024 0 0 Gov. cons. Exports GFCF 2010 2012 2014 2016 2018 2020 2022 2024 2026 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Sources: Bangladesh Bureau of Statistics and World Bank staff estimates. Source: World Bank. Notes: see Table 2. MPO 4 Oct 24 since May 2022). The cap on bank lending The growth slowdown in FY25 will exac- rates was abolished to improve monetary erbate the situation for the most disadvan- transmission. The financial sector remains Outlook taged populations and increase disparities. vulnerable to high non-performing loans. Extreme poverty is expected to rise to 7.0 Higher inflation and reduced employ- Real GDP growth is projected to decline percent, pushing an additional 1.7 million ment opportunities impacted families' to 4.0 percent in FY25 but could range be- people into extreme poverty. According to welfare, who consume a much higher tween 3.2 and 5.2 percent. The wide range the upcoming Poverty Assessment, about percentage of income in food and goods of the projection reflects the unavailability 6 out of 10 individuals are estimated to affected by inflation. Workers in industry of credible data in recent months and sig- have used their savings to maintain house- and services were especially affected, fac- nificant uncertainties around the outlook. hold consumption. Conversely, house- ing job losses of around 4.8 percent and These uncertainties are expected to keep holds benefitting from robust remittance wage reductions (by 2.3 and 0.7 percent), investment and industrial growth sub- inflows will improve their welfare, but the likely pushing their families into extreme dued in the short term. Recent floods are contrasting effect will widen inequality by poverty. Consequently, extreme poverty expected to moderate agriculture growth. 1.4 Gini points. at the USD 2.15 (2017 PPP) threshold is Growth is expected to rise gradually, bene- Thefiscaldeficitisprojectedtoremainbelow projected to increase by 0.7 percentage fiting from critical financial sector reforms, 5.0 percent of GDP over the medium term. In points (or affect 1.2 million people) in increased revenue mobilization, improved theshortterm, total expenditure as a share of 2024. Some families—particularly in agri- business climate, and trade. GDP is expected to decline due to contrac- culture or receiving remittances—were Export growth is anticipated to remain tionary fiscal policy. Over the medium- to able to maintain their welfare. The op- positive, despite short-term challenges due long-term, strengthening revenue perfor- posing trends have likely exacerbated in- to high input costs, weak global demand, mance will be crucial to expand investments equality, with the Gini index increasing and uncertainties within the manufactur- in infrastructure and human capital. by 1.1 points over the year. ing sector. Remittances are projected to Downside risks to the outlook have in- The fiscal deficit was 4.5 percent of GDP stay robust in FY25, supported by the creased substantially. Increased political in- in FY24. Revenue growth was robust adoption of the crawling peg exchange stability, poor corporate governance, and but remained one of the lowest global- rate regime. The financial account will like- the potential insolvency of some banks ly at 8.5 percent of GDP. Expenditure ly remain in surplus, supported by budget could worsen an already weak financial sec- is estimated to have increased modest- assistance from development partners. tor. Persistently elevated inflation, weak ly to 13.0 percent of GDP, driven by Foreign exchange reserves are expected to global demand, energy shortages, and cli- current expenditure. The public debt to stabilize in FY25, albeit with some down- mate shocks could lower the growth out- GDP ratio increased to 38.8 percent but ward pressure due to external payment re- look further and exacerbate vulnerability remained sustainable. quirements to foreign energy suppliers. to falling into poverty. TABLE 2 Bangladesh / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2020/21 2021/22 2022/23 2023/24e 2024/25f 2025/26f a Real GDP growth, at constant market prices 6.9 7.1 5.8 5.2 4.0 5.5 Private consumption 8.0 7.5 2.0 3.9 3.8 4.8 Government consumption 6.9 6.2 8.5 3.5 3.5 9.2 Gross fixed capital investment 8.1 11.7 2.2 4.8 3.1 6.4 Exports, goods and services 9.2 29.4 8.0 2.7 2.1 4.5 Imports, goods and services 15.3 31.2 -9.8 -2.5 0.4 5.1 a Real GDP growth, at constant factor prices 7.0 7.2 6.2 5.3 4.0 5.5 Agriculture 3.2 3.1 3.4 3.3 3.0 3.1 Industry 10.3 9.9 8.4 5.8 3.3 5.4 Services 5.7 6.3 5.4 5.3 4.7 6.0 Inflation (consumer price index) 5.6 6.1 9.0 9.7 9.5 9.0 Current account balance (% of GDP) -1.1 -4.2 -2.8 -1.4 -0.9 -0.5 Net foreign direct investment inflow (% of GDP) 0.3 0.4 0.4 0.4 0.3 0.4 Fiscal balance (% of GDP) -3.7 -4.6 -4.6 -4.5 -4.3 -4.6 Revenues (% of GDP) 9.4 8.5 8.2 8.5 8.3 8.7 Debt (% of GDP) 32.4 33.8 37.0 38.8 40.6 41.8 Primary balance (% of GDP) -1.7 -2.6 -2.5 -1.9 -1.4 -1.6 b,c International poverty rate ($2.15 in 2017 PPP) .. 5.0 5.4 6.1 7.0 5.5 b,c Lower middle-income poverty rate ($3.65 in 2017 PPP) .. 30.0 29.8 29.0 29.0 25.9 b,c Upper middle-income poverty rate ($6.85 in 2017 PPP) .. 74.1 73.7 71.8 70.2 68.0 GHG emissions growth (mtCO2e) 7.3 5.0 2.7 1.8 2.0 2.6 Energy related GHG emissions (% of total) 42.3 44.1 44.6 44.7 44.9 45.3 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ FY23 estimates based on BBS provisional estimates. b/ Calculations based on SAR-POV harmonization, using 2022-HIES. Actual data: 2022. Nowcast: 2023. Forecasts are from 2024 to 2026. c/ Projections using microsimulation methodology. MPO 5 Oct 24 poor. Poverty reduction was more salient in rural areas. Non-monetary well-being BHUTAN Key conditions and dimensions such as education and sanita- tion also improved. However, vulnerabil- challenges ity to climate shocks and spatial inequali- ties persist, with the poverty rate ranging Table 1 2023 Bhutan’s real GDP growth is driven by the from 1.5 percent in Thimphu to 41 percent Population, million 0.8 public-led hydropower sector, resulting in in Zhemgang. As measured by the Gini in- GDP, current US$ billion 2.9 growth spikes during the construction and dex, monetary inequality improved from GDP per capita, current US$ 3717.8 completion of hydropower plants. How- 37 to 28, yet spatial disparities persist. a 0.0 International poverty rate ($2.15) ever, the hydropower sector employs less Downside risks to the economic outlook a 0.5 than one percent of the labor force while persist. Domestic risks include delays in Lower middle-income poverty rate ($3.65) a 8.4 the subsistence agriculture sector employs hydropower projects, which affect growth, Upper middle-income poverty rate ($6.85) Gini index a 28.5 over 40 percent. High youth unemploy- and fiscal and external balances. Delayed School enrollment, primary (% gross) b 103.8 ment rate (19.2 percent in 2024) and lim- fiscal consolidation and materialization of b 72.2 ited labor opportunities, especially for financial sector contingent liabilities could Life expectancy at birth, years skilled workers, increased emigration, further erode fiscal buffers. External risks Total GHG emissions (mtCO2e) -5.1 with 9 percent of Bhutanese living abroad. include rising and volatile commodity Source: WDI, Macro Poverty Outlook, and official data. Generous provision of public services and prices due to geopolitical tensions, natural a/ Most recent value (2022), 2017 PPPs. b/ Most recent WDI value (2022). low tax revenue have led to persistent fis- disasters, and climate-related hazards, cal deficits. Major national investment in which could impact livelihoods and infra- cryptocurrency mining has further pres- structure development. Continued emigra- Economic growth rose to 5.3 percent in sured international reserves and worsened tion of skilled labor continues to weigh on CAD since FY21/22, already strained by the economy and is likely to have a nega- FY23/24 and is projected to increase fur- import reliance. The new government aims tive effect in the medium term. ther in the short to medium term due to to transform its economy through the 13th the commissioning of new hydropower Five-Year Plan (FYP) launched in July 2024 plants and recovery of the tourism sector. focusing on private sector development, Fiscal performance improved with a series job creation, infrastructure investments, Recent developments and public sector reforms. of consolidation measures. The current Economic growth contributed to poverty Real GDP grew by 5.3 percent in FY23/ account deficit (CAD) is expected to im- reduction during 2017-2022. Extreme 24 (July 2023 to June 2024), supported by prove with increased hydropower, non- poverty ($2.15/day) was nearly eliminated, the recovery of the tourism sector and hydropower (mining and forestry), and and those living below $3.65/day and growth of the non-hydropower industry $6.85/day dropped sharply. Remittances (base metals and ferro-silicon). The agri- tourism exports and reduced cryptocur- were crucial to improving welfare among culture sector returned to the pre-pandem- rency equipment imports. Despite signifi- recipient households. Without remittances, ic growth rate of 3.4 percent after stagnat- cant progress, 19 percent of Bhutanese re- the poverty rate would be substantially ing in previous years. Industry growth main vulnerable to falling into poverty. higher with an estimated 24,000 more peo- stalled at 0.2 percent, due to contraction in ple (3 percent of Bhutanese) classified as the hydropower and construction sectors, FIGURE 1 Bhutan / Real GDP growth and contributions to FIGURE 2 Bhutan / Actual and projected poverty rates and real GDP growth real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 25 70 300000 20 60 250000 15 50 10 200000 5 40 150000 0 30 -5 100000 20 -10 50000 10 -15 2001 2006 2011 2016 2021 2026 0 0 Private cons. Public cons. GFCF 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 Inventories Export Import International poverty rate Lower middle-income pov. rate GDP growth Upper middle-income pov. rate Real GDP pc Sources: National Account Statistics and National Statistics Bureau (NSB). Source: World Bank. Notes: see Table 2 MPO 6 Oct 24 accounting for 72 percent of the industry for energy-intensive cryptocurrency min- landslides (forthcoming Bhutan Poverty sector, despite strong growth in mining ing operations. Gross international re- and Equity Assessment, 2024). and quarrying. The services sector grew by serves increased modestly to US$624 mil- The fiscal deficit is expected to widen be- a robust 8.7 percent, led by tourism-relat- lion in June 2024 (4.7 months of imports). fore improving in the medium term with ed services. Demand side growth was dri- consolidation and rising revenues. The fis- ven by non-hydropower exports and con- cal deficit is projected to increase to 4.4 sumption. Headline inflation decelerated percent in FY24/25, driven by increase in from 4.6 to 4.3 percent, due to lower food Outlook capital expenditure for the 13th FYP. and non-food inflation. Goods and Services Tax implementation The fiscal deficit narrowed by 3.9 percent- Real GDP growth is projected to rise to 7.2 and one-off profit transfers from commis- age points in FY23/24 to 0.8 percent of percent in FY24/25, led by commissioning sioning of Puna II in FY25/26, along with GDP, driven by improved domestic rev- of Puna-II hydropower plant and growth BTN 100 billion (US$1.2 billion) grant from enue and reduced capital expenditures de- in the non-hydropower industry and the Indian government will boost revenue. spite major increase in public sector wages. tourism sectors. On the demand side, Primary non-wage recurrent expenditure Current expenditures increased due to a growth is supported by non-hydropower is expected to moderate. Public debt will major salary hike for public servants rang- exports and 13th FYP-related public in- remain elevated, rising to 122 percent of ing from 55 to 74 percent, aimed at curbing vestments. Medium-term growth will be GDP in FY25/26 but considered sustain- the high attrition rate of public servants. driven by robust electricity production, able as most of it is linked to hydropower Capital expenditure remained low in construction, and services sectors on the loans. However, rising debt service may FY23/24, as most of the capital spending of supply side and growth of exports and limit the fiscal space for social spending. the 12th FYP was frontloaded in FY20/21 to public investment on the demand side. The The CAD is projected to decline to 17.5 and support pandemic recovery. lifting of housing construction loans mora- 9.3 percent of GDP in FY24/25 and FY25/ The CAD remains elevated at 22.7 percent torium and launching of the collateral-free 26, before moderating further in the medi- of GDP in FY23/24, albeit significantly nar- concessional credit line in FY24/25 is ex- um term. This is driven by continued re- rowed from a peak of 34 percent in the pre- pected to boost investments and growth. duction of cryptocurrency and hydropow- vious year despite lower hydropower ex- Poverty reduction is expected to continue, er plants construction related imports. Ex- ports, due to a reduction in cryptocurrency with the $6.85/day poverty rate falling to port is projected to grow with higher hy- mining related IT imports and continued 5.9 percent in FY24/25 and 5.0 percent in dropower exports from the commissioning recovery of the tourism sector. Hydropow- FY25/26. However, a substantial share of of Puna-II, increased non-hydropower er exports declined, despite the commis- the population (19 percent of the total pop- (mining and timber), and tourism exports. sioning of the Nikachhu hydropower ulation or 200,000) remains vulnerable to As a result, international reserves are pro- plant, due to increased domestic consump- poverty due to climate change hazards, jected to increase to US$717 million in tion, reflecting the higher electricity needs with nearly half of the poor exposed to FY24/25 (5.1 months of import coverage). TABLE 2 Bhutan / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2020/21 2021/22 2022/23 2023/24e 2024/25f 2025/26f Real GDP growth, at constant market prices -3.3 4.8 5.0 5.3 7.2 6.6 Private consumption 0.3 1.5 6.9 5.6 3.1 3.7 Government consumption 5.4 1.9 -0.5 6.4 5.2 0.3 Gross fixed capital investment -3.4 25.4 5.6 -7.6 5.9 7.3 Exports, goods and services -10.4 -3.6 9.8 19.1 12.0 12.3 Imports, goods and services -0.5 13.2 7.5 0.2 4.0 5.5 Real GDP growth, at constant factor prices -2.3 4.9 4.8 5.2 7.2 6.6 Agriculture 2.7 0.1 0.1 3.4 5.3 5.0 Industry -5.9 4.8 2.7 0.2 10.1 12.9 Services -1.2 6.3 7.4 8.7 6.1 3.3 Inflation (consumer price index) 8.2 5.9 4.6 4.3 1.1 4.0 Current account balance (% of GDP) -11.1 -28.1 -34.0 -22.7 -17.5 -9.3 Fiscal balance (% of GDP) -5.8 -7.0 -4.7 -0.8 -4.4 -2.5 Revenues (% of GDP) 30.9 25.1 25.3 26.4 26.5 29.6 Debt (% of GDP) 123.3 118.8 116.1 110.7 104.8 121.6 Primary balance (% of GDP) -4.8 -5.6 -3.0 1.1 -2.4 0.5 a,b International poverty rate ($2.15 in 2017 PPP) .. 0.0 .. .. .. .. a,b Lower middle-income poverty rate ($3.65 in 2017 PPP) .. 0.5 0.4 0.3 0.3 0.2 a,b Upper middle-income poverty rate ($6.85 in 2017 PPP) .. 8.4 7.7 6.9 5.9 5.0 GHG emissions growth (mtCO2e) 0.1 -1.7 -1.8 -1.6 -1.6 -1.5 Energy related GHG emissions (% of total) -14.3 -15.6 -17.0 -18.3 -19.5 -20.7 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Calculations based on SAR-POV harmonization, using 2022-BLSS. Actual data: 2022. Nowcast: 2023. Forecasts are from 2024 to 2026. b/ Projection using neutral distribution (2022) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU. MPO 7 Oct 24 Risks to the medium-term outlook are manageable. Unexpected climatic shocks INDIA Key conditions and could delay agricultural recovery and heightened geopolitical tensions could af- challenges fect commodity prices. However, India’s large domestic market, diversified econo- Table 1 2023 Between 2000 and 2019, economic growth my, and adequate foreign exchange re- Population, million 1428.6 averaged 6.6 percent annually, per capita serves provide significant resilience GDP, current US$ billion 3567.1 GDP grew more than two-fold, and ex- against these shocks. GDP per capita, current US$ 2496.9 treme poverty was reduced by two-thirds. To sustain its robust growth trajectory, In- a 112.0 School enrollment, primary (% gross) The strong performance coincided with dia should deepen factor market reforms a 67.7 deeper global integration and improve- and improve the business environment to Life expectancy at birth, years Total GHG emissions (mtCO2e) 3672.3 ments in the business environment. The stimulate private investment; focus on skill Source: WDI, Macro Poverty Outlook, and official data. COVID shock caused a deep contraction development and improving educational a/ WDI for School enrollment (2023); Life expectancy (by 5.8 percent in FY20/21) but the econ- outcomes to maximize its demographic (2022). omy rebounded swiftly, averaging 8 per- dividend; and leverage global markets by cent growth over the following three fis- reducing trade barriers and costs. cal years. However, by the end of FY23/ 24, the economy was still 7 percent small- er than it would have been under its pre- pandemic growth trajectory. Recent developments Despite significant welfare gains, 44 per- Despite a subdued global backdrop, the cent of the population still lived below the India grew 8.2 percent in FY23/24, remain- Indian economy expanded by 8.2 per- lower middle-income poverty line and 12.9 ing the fastest-growing major economy. cent in FY23/24, reflecting strong percent below the extreme poverty line in After contracting in FY22/23, manufactur- growth in manufacturing and construc- FY21/22 (see footnote a/). Consumption- ing output expanded by 9.9 percent in based inequality has remained steady but FY23/24, reflecting increased demand from tion. This strong momentum is project- high (Gini index of 33). Access to services the construction sector. Service sector ed to continue over the medium term varies widely across states, with multidi- growth, while robust, moderated to 7.6 as a nascent private investment cycle is mensional poverty ranging from less than percent as the post-pandemic recovery expected to firm up. Employment and 1 percent in Kerala to 35 percent in Bihar. slowed and unfavorable monsoons muted New data shows that the compound an- agricultural growth. On the demand side, worker participation rates increased in nual growth in real per capita consump- increased investment, especially in public 2022-23, but high rates of tertiary tion averaged 3 percent between 2011-12 infrastructure and private real estate, offset youth unemployment, low rates of paid and 2022-23 (Inflation-adjusted; House- a slowdown in private consumption as employment for women, and poor job hold Consumption and Expenditure Sur- rural income growth moderated. quality remain a concern. veys), with wide variation within and Headline inflation slowed to 5.4 percent across states (8.5 percent in Sikkim versus in FY23/24, primarily thanks to lower fuel only 0.9 percent in rural Nagaland and prices. However, food price inflation con- 0.6 percent in urban West Bengal). tinued to be high and volatile, posing risks FIGURE 1 India / Real GDP growth and contributions to real FIGURE 2 India / Actual poverty rates and real GDP per capita GDP growth at factor cost Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 12 80 120000 Forecast 70 100000 8 60 80000 50 4 40 60000 30 0 40000 20 20000 Services 10 -4 Industry Agriculture 0 0 Real GDP growth, at constant factor prices 2009 2011 2013 2015 2017 2019 2021 -8 International poverty rate Lower middle-income pov. rate FY16/17 FY18/19 FY20/21 FY22/23 FY24/25 FY26/27 Real GDP pc Sources: National Statistics Office (NSO) and World Bank. Source: World Bank. Notes: see Table 2. Note: FY16/17 refers to the fiscal year 2016-17 (April 2016-March 2017) and so on. MPO 8 Oct 24 to welfare as about one-third of the pop- revenue growth and stable current spend- expected to rise with improved rural in- ulation is undernourished. Persistent food ing more than offset a 28 percent increase comes. Although public investment inflation can further worsen malnutrition in capital spending. However, public debt- growth may moderate, private corporate and stunting among vulnerable groups. As to-GDP rose to 83.9 percent in FY23/24 due investment growth is set to increase, dri- of August 2024, the Reserve Bank of India to slowed nominal GDP growth. ven by growing consumer demand. Ex- has kept the policy rate unchanged at 6.5 The current account deficit narrowed to ports are projected to grow faster amid percent since February 2023. 0.7 percent of GDP in FY23/24 from recovering global trade conditions and In 2022-23, net employment growth ex- 2.0 percent in FY22/23. The merchandise expected rate cuts by major central banks. ceeded the increase in the working-age balance improved, aided by declining Robust growth, particularly in rural in- population. The worker-population ratio global commodity prices, while services comes, should sustain poverty reduction, increased across all groups, with women trade maintained a surplus. Net foreign but more labor-intensive growth is needed experiencing a five percentage point rise direct investment dropped sharply due to accelerate this trend. to 30.8 percent. However, despite the im- to increased repatriation, but foreign Headline inflation continued to fall in Q1 provement, youth unemployment rates re- portfolio investment inflows increased FY24/25 and is projected to reach RBI’s 4 mained elevated and paid employment for ahead of India’s inclusion in global percent target over the medium term, bar- women is still low. Job quality also re- bond indices. India’s foreign exchange ring major climate shocks. Food price in- mained a concern; 74 percent of the added reserves rose to US$670 billion, provid- flation remains volatile but is expected to jobs were in self-employment, of which 43 ing an ample buffer. ease with favorable monsoon conditions. percent were unpaid. Over one-fifth of The overall fiscal deficit is projected to nar- workers are in low-skill, elementary occu- row thanks to continued strong revenue pations, and informality prevails in agri- growth (from improved compliance and a culture (where nearly all jobs are informal) Outlook broader tax base) and modest spending and paid non-farm employment (of which growth. Thus debt-to-GDP is projected to only 22 percent are formal). Two in five Growth is projected to remain strong at decline to around 82 percent by FY26/27. employed individuals earned incomes in- around 7 percent over the medium term. The current account deficit is projected to sufficient to keep an average family above Agricultural growth is expected to recov- widen to around 1.5 percent of GDP over the lower middle-income poverty line, and er to 4.1 percent in FY24/25, thanks to im- the medium term due to increased domes- a quarter of workers did not earn enough proved monsoon, and services and man- tic demand and is expected to be adequate- to lift a family out of extreme poverty. ufacturing sectors are projected to grow ly financed by gradually improved foreign The general government fiscal deficit nar- above 7 percent. On the demand side, (direct and portfolio) investment flows. In- rowed to 8.5 percent of GDP in FY23/24, government consumption will likely re- dia’s ample foreign exchange reserves are from 9.6 percent in FY22/23, thanks to con- main subdued due to continued fiscal expected to remain sufficient, covering solidation at the central level. Strong tax consolidation, but private consumption is about eight months of imports. TABLE 2 India / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2021/22 2022/23 2023/24 2024/25e 2025/26f 2026/27f Real GDP growth, at constant market prices 9.7 7.0 8.2 7.0 6.7 6.7 Private consumption 11.7 6.8 4.0 5.7 6.0 6.1 Government consumption 0.0 9.0 2.5 4.3 5.0 5.0 Gross fixed capital investment 17.5 6.6 9.0 7.8 7.7 7.7 Exports, goods and services 29.6 13.4 2.6 7.2 7.2 7.9 Imports, goods and services 22.1 10.6 10.9 4.1 6.3 7.3 Real GDP growth, at constant factor prices 9.4 6.7 7.2 7.0 6.7 6.7 Agriculture 4.6 4.7 1.4 4.1 3.9 3.7 Industry 12.2 2.1 9.5 7.6 7.3 7.2 Services 9.2 10.0 7.6 7.4 7.1 7.1 Inflation (consumer price index) 5.5 6.7 5.4 4.5 4.1 4.0 Current account balance (% of GDP) -1.2 -2.0 -0.7 -1.1 -1.2 -1.6 Net foreign direct investment inflow (% of GDP) 1.2 0.8 0.3 1.0 1.2 1.5 Fiscal balance (% of GDP) -9.5 -9.6 -8.5 -7.8 -7.5 -7.3 Revenues (% of GDP) 20.6 21.5 21.9 21.9 21.9 21.7 Debt (% of GDP) 84.8 82.5 83.9 83.7 83.0 82.0 Primary balance (% of GDP) -4.3 -4.4 -3.1 -2.5 -2.2 -2.1 a International poverty rate ($2.15 in 2017 PPP) 12.9 .. .. .. .. .. a Lower middle-income poverty rate ($3.65 in 2017 PPP) 44.1 .. .. .. .. .. GHG emissions growth (mtCO2e) 7.7 4.4 2.8 2.8 2.8 3.2 Energy related GHG emissions (% of total) 68.5 69.5 70.3 70.9 71.2 71.5 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Estimates are based on the Uniform Recall Period using survey-to-survey imputation (Roy and van der Weide (2022)). These estimates will be revised based on the 2022-23 Household Consumption Expenditure Survey when finalized. Extreme poverty line is defined at $2.15 per capita per day, and lower middle-income poverty line at $3.65 per capita per day (2017 PPP). MPO 9 Oct 24 spending efficiency and rationalizing cap- ital expenditure. Overnight subsidy re- MALDIVES Key conditions and moval, if uncompensated, could cause poverty ($6.85 per person per day, 2017 challenges PPP) to almost double nationally and in the atolls. However, the implementation of Table 1 2023 Tourism, the key driver of economic these reforms has yet to commence, and it Population, million 0.5 growth, continues to support economic will also require candid and timely com- GDP, current US$ billion 6.6 activity and fiscal revenues with in- munication to the public. GDP per capita, current US$ 12678.3 creased arrivals from China, Russia, a 3.9 Upper middle-income poverty rate ($6.85) and the UK. However, a decline in a 29.3 spending per tourist has moderated Gini index School enrollment, primary (% gross) b 97.8 the impact of the sector’s strong per- Recent developments Life expectancy at birth, years b 80.8 formance on overall growth. Total GHG emissions (mtCO2e) 2.9 Large increases in government spending The economy grew by 4.1 percent (y-o-y) and reliance on external non-concession- in 2023 and 9.8 percent (y-o-y) in Q12024. Source: WDI, Macro Poverty Outlook, and official data. a/ Most recent value (2019), 2017 PPPs. al financing for infrastructure projects Tourist arrivals reached 1.3 million in Au- b/ Most recent WDI value (2022). in recent years have worsened external gust and are projected to reach a historical and fiscal vulnerabilities and significant- high of 2 million in 2024 (8.6 percent above ly increased public debt. Persistent large 2023). However, due to a continued de- current account and fiscal deficits have crease in spending per tourist, these higher Economic growth is projected to remain led to a major depletion in already lim- arrivals are not expected to significantly ited official reserves. Pressure on fiscal increase growth, with real GDP growth robust over the medium term, driven by accounts this year has been aggravat- projected at 4.7 percent in 2024. strong performance in the tourism sector. ed by the government’s continued pro- Domestic inflation remained low at an av- However, long-standing fiscal and exter- vision of blanket subsidies, capital in- erage of 0.5 percent (y-o-y) in H12024. nal imbalances, including a recent sharp jections to underperforming state-owned However, food inflation experienced a enterprises (SOEs), and high levels of sharp increase, reaching an average of 6.7 decline in official reserves, raise substan- public health spending. The unavailabil- percent (y-o-y) in the same period, increas- tial liquidity and solvency concerns. ity of finance has led to a notable re- ing costs of living for all, especially for less A major fiscal adjustment is urgently re- duction in capital spending, an accumu- well-off households (who spend 35.2 per- quired to address these vulnerabilities lation of expenditure arrears, and con- cent of their budget on food). cerns about the financial health of the A decline in fish exports of 45.5 percent (y- and ensure macroeconomic stability, construction industry. o-y) and growth in goods imports of 6.4 which could increase vulnerability to To tackle the economic difficulties, the percent (y-o-y) in H12024, widened the falling into poverty. Cushioning the im- government announced a homegrown fis- trade deficit to US$1.5 billion in H12024, pact on the poor and vulnerable from in- cal reform agenda in February 2024, in- from US$1.4 billion in H12023. Higher im- come and welfare losses will be critical. cluding reforms that phase out existing port costs and external debt repayments al- subsidies and replace them with a targeted so put significant pressure on official re- cash transfer scheme, improving health serves, which fell from US$590.5 million FIGURE 1 Maldives / Real GDP growth and contributions to FIGURE 2 Maldives / Actual and projected poverty rates real GDP growth and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 30 60 250000 Agri. and Fish. Manufacturing 25 50 Electricity and water 200000 Construction 20 Wholesale and retail trade 40 Tourism 150000 15 Transp. and comm. 30 Others Real GDP growth 100000 10 20 5 50000 10 0 0 0 2009 2011 2013 2015 2017 2019 2021 2023 2025 -5 International poverty rate Lower middle-income pov. rate 2022Q1 2022Q3 2023Q1 2023Q3 2024Q1 Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: see Table 2. MPO 10 Oct 24 in December 2023 to US$395.4 million in absence of mitigating transfers, subsidy July 2024 (from 1.4 to 0.9 months of im- removal could double poverty rates. As- ports). Similarly, usable reserves declined Outlook suming a budget of MVR 1.2 billion, from US$179 million to an all-time low of a universal cash transfer would only US$43.7 million in the same period. Supported by tourism, the economy is pro- partly offset the welfare losses, but a While recurrent expenditure declined by jected to grow by 4.7 percent on average more generous targeted cash transfer to 7.2 percent (y-o-y) in H12024, lower than over the medium term—lower than the the bottom 60 percent of the population expected due to delayed subsidy reforms, pre-pandemic average of 7.4 percent. This could fully compensate. capital expenditure declined by 47.6 per- outlook is predicated on a major fiscal ad- The current account deficit is expected to cent (y-o-y) in H12024 due to infrastruc- justment—including the negative impacts narrow from 21.2 percent of GDP in 2023 ture project cuts. Overall, total expenditure on real household incomes and a reduction to 12.1 percent of GDP in 2026, supported is expected to moderate in 2024, yet this in government consumption and invest- by robust growth in service exports and will be overshadowed by the buildup of ment—and more moderate spending per slower growth in imports. High external fi- expenditure arrears. With lower revenue tourist. Inflation is projected to rise signif- nancing needs—including significant debt collections, which declined by 5.7 percent icantly over the medium term, due to the servicing—are expected to sustain pres- (y-o-y) in H12024 due to lower non-tax planned subsidy reform. sure on official reserves and threaten over- revenues, the estimated fiscal deficit at Assuming a timely implementation of all macroeconomic stability. end-June remained at 12.8 percent of the government’s fiscal reform package, Major downside risks exist. Any shock to GDP—similar to 2023. Given the author- including a meaningful spending reduc- the tourism sector could worsen the ities have not published monthly and tion, the fiscal deficit is expected to nar- growth outlook. Limited domestic and ex- weekly fiscal developments since end- row from 12.7 percent of GDP in 2023 ternal financing may exacerbate liquidity June, this has led to further concerns over to 6.1 percent of GDP in 2026. As a re- and solvency concerns, especially consid- the country’s fiscal situation. sult, public debt is projected to gradu- ering the approaching spike in external With the persistence in domestic and ex- ally decline from 122.8 percent of GDP debt servicing payments. A major fiscal ternal financing difficulties, the central in 2023 to 111.4 percent of GDP in 2026. adjustment is urgently required to ensure bank’s (MMA) exposure to government The poverty outlook remains uncertain, macroeconomic stability. Any delay in fis- securities rose further to 61.0 percent of depending on the timing and scope of cal reforms could lead to a further deterio- its total financial assets by mid-2024, from reforms, the impact on labor markets, ration of current vulnerabilities and an un- 58.2 percent in 2023. and the design of cash transfers. In the precedented economic shock. TABLE 2 Maldives / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2021 2022 2023 2024e 2025f 2026f Real GDP growth, at constant market prices 37.7 13.9 4.1 4.7 4.7 4.6 Real GDP growth, at constant factor prices 33.8 15.0 3.5 4.7 4.7 4.6 Agriculture -0.7 3.1 0.8 -7.5 3.4 2.9 Industry -4.6 25.2 7.6 2.3 1.6 0.9 Services 43.4 14.7 3.1 5.8 5.2 5.1 Inflation (consumer price index) 0.5 2.3 2.9 2.3 7.8 4.5 Current account balance (% of GDP) -8.6 -16.3 -21.2 -15.9 -13.7 -12.1 Net foreign direct investment inflow (% of GDP) 12.2 11.9 12.1 12.0 12.2 12.0 Fiscal balance (% of GDP) -14.2 -11.6 -12.7 -9.4 -7.8 -6.1 Revenues (% of GDP) 26.4 30.6 33.5 31.9 34.1 33.6 Debt (% of GDP) 116.4 112.3 122.8 119.3 114.9 111.4 Primary balance (% of GDP) -11.6 -8.0 -8.6 -4.1 -3.1 -1.5 a,b Upper middle-income poverty rate ($6.85 in 2017 PPP) 5.8 2.7 2.3 .. .. .. GHG emissions growth (mtCO2e) 4.9 13.4 9.0 8.6 8.3 8.0 Energy related GHG emissions (% of total) 75.5 77.7 78.8 79.9 80.8 81.7 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Calculations based on SAR-POV harmonization, using 2019-HIES. Actual data 2019. Nowcast based on microsimulations using sectoral GDP growth rates, and food and non-food inflation separately: 2021-2023. b/ Nowcast and projections are not available. MPO 11 Oct 24 Poverty incidence varies significantly across provinces, with the poverty rate NEPAL Key conditions and (based on the national poverty line) as high as 34.2 percent in Sudurpashchim and as challenges low as 11.9 percent in Gandaki. Inequality (Gini index) in urban areas (30.3) is higher Table 1 2023 Nepal’s economy has demonstrated re- than in rural areas (28.7). Sluggish job cre- Population, million 30.9 markable resilience, growing at an aver- ation with a high youth unemployment GDP, current US$ billion 40.9 age of 4.5 percent over the past decade rate (22.7 percent in 2022/2023) makes em- GDP per capita, current US$ 1324.0 despite significant external shocks. Over igration a preferred option for Nepalis a 0.4 International poverty rate ($2.15) 20 percent of the population is classified across the income distribution (particular- a 7.5 as poor using the revised national ly the young male), contributing to a loss Lower middle-income poverty rate ($3.65) a 44.1 poverty line. However, welfare has sig- of skilled workforce. Upper middle-income poverty rate ($6.85) Gini index a 30.0 nificantly improved in the last decade, Despite these positive developments, School enrollment, primary (% gross) b 123.0 mainly due to increased remittances. As Nepal's per capita income level remains b 70.5 a result, extreme poverty, applying the below its peers. Persistent challenges such Life expectancy at birth, years international poverty line of $2.15 per as low productivity and weak internation- Total GHG emissions (mtCO2e) 50.6 day, has been nearly eliminated, and al competitiveness hinder sustained high Source: WDI, Macro Poverty Outlook, and official data. the percentage of Nepalis living on less growth rates. Additionally, challenges re- a/ Most recent value (2022), 2017 PPPs. b/ Most recent WDI value (2022). than $3.65/day and $6.85/day has signif- lated to the effective implementation of icantly reduced. Consumption inequality federalism and other governance issues has also decreased, with the Gini index constrain economic progress. Growth accelerated in FY24, driven by falling from 32.8 to 30.0 and the prosper- ity gap narrowing. Without remittances, tourism, hydropower, and remittance-dri- over 2.6 million more people would be ven private consumption. Reduced recur- classified as poor. Human capital has im- Recent developments rent spending lowered the fiscal deficit, proved, with 94 percent of households while lower imports and higher remit- gaining electricity access, up from 70 per- Growth accelerated to 3.9 percent in cent. Progress includes reduced distance FY24, from 2 percent in FY23. The ser- tances led to the first current account to public hospitals and increased avail- vices sector was a key driver, fueled by a surplus in years. Despite reduced mone- ability of paved roads. Spatial inequal- surge in tourist arrivals that boosted ac- tary poverty, 14.5 million Nepalis remain ities persist, with the poorest provinces tivities in transportation, accommodation, vulnerable to climate risks, and millions like Sudurpashchim and Karnali experi- and food services. Increased hydropow- may fall back into poverty due to climate encing longer distances to paved roads er and paddy productions also supported and lower electricity access compared to growth. On the demand side, high re- shocks and persistently weak local eco- national averages. mittances boosted private consumption, nomic opportunities. While medium-term Vulnerability to climate shocks also re- while low capital spending kept public growth is projected to be around 5 per- mains a challenge. Although poverty re- investment subdued. cent, risks remain, including political. duction is particularly salient in rural ar- Headline inflation fell to 5.4 percent in FY24 eas, poverty remains predominantly rural. from 7.7 percent in FY23, below the central FIGURE 1 Nepal / The current account balance turned FIGURE 2 Nepal / Actual and projected poverty rates and positive in FY24 real GDP per capita Percent of GDP Poverty rate (%) Real GDP per capita (constant LCU) 30 90 100000 20 80 90000 70 80000 10 70000 60 0 60000 50 50000 -10 40 40000 30 -20 30000 20 20000 -30 10 10000 -40 0 0 FY19 FY20 FY21 FY22 FY23 FY24 2010 2012 2014 2016 2018 2020 2022 2024 2026 Workers' remittances Balance of goods and services International poverty rate Lower middle-income pov. rate Current account balance Upper middle-income pov. rate Real GDP pc Sources: World Bank staff calculations and Nepal Rastra Bank. Source: World Bank. Notes: see Table 2. MPO 12 Oct 24 bank's 6.5 percent target, mainly due to re- following the peak migration in FY23. Un- duced non-food and services inflation. der the baseline scenario, foreign reserves The current account balance turned posi- Outlook are projected to remain sufficient to cover tive for the first time in eight years in FY24, imports for over nine months at end-FY26. driven by increased remittances from Growth is projected to accelerate to 5.1 A gradual reduction in the fiscal deficit is ex- record migration in FY23 and lower im- percent in FY25 and 5.5 percent in FY26. pected over the medium term, driven by de- ports of intermediate goods. Exports in- The wholesale, retail, construction, and creased recurrent expenditure and revenue creased due to record-high electricity ex- manufacturing, which together account for measures. New tax measures in the FY25 ports and growth in export services from over one-fifth of the GDP, are poised to budget and the implementation of the Do- higher tourist arrivals. Consequently, for- benefit from the central bank's loosening of mestic Revenue Mobilization Strategy are eign reserves grew, reaching 13 months of monetary policy and easing of regulatory anticipated to increase revenue collection. import cover at end-FY24. requirements. This is anticipated to stimu- While planned capital expenditure is pro- The fiscal deficit narrowed to a seven- late private investment, while remittance- jected to rise, its execution is likely to remain year low of 2.6 percent of GDP in FY24, driven private consumption, along with constrained by the slow implementation of largely due to reduced recurrent expen- hydropower and tourism exports, is ex- the national project bank. Public debt is also diture driven by austerity measures and pected to bolster growth. expected to decline due to smaller fiscal lower intergovernmental transfers. Do- Inflation is anticipated to remain moder- deficits and higher economic growth. mestic revenue collection improved ate due to declining global commodity While Nepal's medium-term outlook re- slightly, with increases in both trade and prices and increased agricultural produc- mains generally positive, it faces several non-trade revenues. The fiscal deficit was tion. As a result, the poverty ($3.65/day) downside risks. Increased financial sector financed through a combination of do- is expected to decline to 6 percent in vulnerabilities could curtail private sector mestic and external concessional borrow- 2025 and 5.4 percent in 2026. Howev- credit. Political instability might lead to ings. Public debt reached 42.7 percent of er, 14.5 million people are vulnerable inconsistent policies, deterring investors. GDP by end-FY24. However, Nepal re- to falling into poverty due to climate Delays in implementing capital expendi- mains at a low risk of debt distress due change hazards, particularly in the north- tures could negatively impact growth. Ex- to both external and overall public debt. ern mountainous areas. ternally, regional instability and trade dis- The central bank reduced the policy rate The current account surplus is expected to ruptions could reduce tourism and do- twice in FY24, from 7 percent to 5.5 per- moderate in FY25 in response to increased mestic demand. Emigration is crucial for cent, to stimulate private sector credit. imports. However, a projected increase in poverty reduction, but high vulnerability However, credit as a proportion of GDP net electricity exports is expected to par- persists due to a weak labor market and remained stagnant, while non-performing tially offset this. Remittances are expected reliance on inadequate and non-respon- loans rose to a record 4 percent. to stabilize at around 25 percent of GDP sive social assistance programs. TABLE 2 Nepal / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2021 2022 2023 2024e 2025f 2026f Real GDP growth, at constant market prices 4.8 5.6 2.0 3.9 5.1 5.5 Private consumption 8.0 6.8 0.7 1.1 1.8 2.9 Government consumption -1.7 9.6 -21.2 -11.1 5.8 5.5 Gross fixed capital investment 9.8 3.4 -10.0 18.4 16.5 13.1 Exports, goods and services -21.3 34.1 3.3 18.1 11.3 13.2 Imports, goods and services 18.8 16.4 -18.7 -2.3 10.4 9.7 Real GDP growth, at constant factor prices 4.5 5.3 2.3 3.5 5.1 5.5 Agriculture 2.8 2.4 2.8 3.0 3.3 3.4 Industry 6.9 10.7 1.4 1.3 4.9 7.5 Services 4.7 5.3 2.4 4.5 6.1 6.0 Inflation (consumer price index) 3.6 6.3 7.7 5.4 5.0 4.5 Current account balance (% of GDP) -7.7 -12.5 -0.9 3.9 2.6 1.7 Net foreign direct investment inflow (% of GDP) 0.4 0.4 0.1 0.1 0.2 0.2 Fiscal balance (% of GDP) -4.0 -3.6 -5.8 -2.6 -2.2 -1.9 Revenues (% of GDP) 23.3 22.9 19.3 19.4 20.0 20.3 Debt (% of GDP) 39.9 40.5 42.9 42.7 42.2 41.3 Primary balance (% of GDP) -3.2 -2.7 -4.5 -1.1 -0.8 -0.7 a,b International poverty rate ($2.15 in 2017 PPP) .. 0.4 0.3 0.3 0.2 0.2 a,b Lower middle-income poverty rate ($3.65 in 2017 PPP) .. 7.5 7.3 6.8 6.1 5.4 a,b Upper middle-income poverty rate ($6.85 in 2017 PPP) .. 44.1 43.6 42.3 39.6 37.4 GHG emissions growth (mtCO2e) 3.2 -1.1 -0.4 3.6 3.8 4.1 Energy related GHG emissions (% of total) 32.6 31.3 30.1 31.4 32.7 34.4 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Calculations based on SAR-POV harmonization, using 2022-LSS-IV. Actual data: 2022. Nowcast: 2023. Forecasts are from 2024 to 2026. b/ Projection using neutral distribution (2022) with pass-through = 0.7 (Low (0.7)) based on GDP per capita in constant LCU. MPO 13 Oct 24 PAKISTAN Key conditions and Recent developments challenges After contracting by 0.2 percent y-o-y in FY23, real GDP growth at factor cost rose Table 1 2023 Pakistan faced an economic crisis at the to 2.4 percent in FY24. On favorable weath- Population, million 240.5 beginning of FY24 with heightened risks er conditions, agriculture growth reached GDP, current US$ billion 338.2 of debt default. Political uncertainty, fiscal a 19-year high of 6.3 percent (Figure 1), GDP per capita, current US$ 1406.1 and external imbalances, and global mone- real agricultural labor income grew by 5 a 4.9 International poverty rate ($2.15) tary tightening led to pressures on domes- percent and the sector’s share in GDP rose a 39.8 tic prices and foreign reserves. Measures to 22.7 percent. As easing external pres- Lower middle-income poverty rate ($3.65) a 84.5 to manage imports and capital outflows sures permitted the lifting of import and Upper middle-income poverty rate ($6.85) Gini index a 29.6 were introduced, disrupting local supply capital controls, the industry and services School enrollment, primary (% gross) b 84.4 chains, economic activity and exacerbating sectors grew by a modest 1.5 percent and b 66.4 inflationary pressures. 1.1 percent, respectively. Tepid growth in Life expectancy at birth, years The situation has improved significantly non-agricultural sectors led to falling real Total GHG emissions (mtCO2e) 520.3 since then, even if risks remain high. With wages for construction, trade, and trans- Source: WDI, Macro Poverty Outlook, and official data. the approval of the IMF Stand-By Arrange- portation, while employment and labor a/ Most recent value (2018), 2017 PPPs. b/ Most recent WDI value (2022). ment in July 2023, exchange rate flexibility force participation rates and job quality in- was restored, import controls were re- dicators have not risen. These together laxed, and fiscal consolidation measures with fiscal consolidation and high inflation Pakistan's economy stabilized in FY24, were introduced. Political uncertainty also led to a poverty rate of 40.5 percent in FY24 lessened post-elections. Coupled with and an additional 2.6 million Pakistanis supported by strong agricultural growth, strong agricultural growth, the economy falling below the poverty line (Figure 2). improved macroeconomic policies, new began recovering in FY24. However, over- The current account deficit (CAD) nar- external financing, easing import con- all real labor income declined, and with el- rowed to 0.2 percent of GDP in FY24 from trols, and political uncertainty. Howev- evated inflation, poverty rose in FY24. 1.0 percent in FY23 due to a smaller trade Downside risks remain high, with the re- deficit on lower domestic demand and er, with policy tightening, elevated infla- covery expected to continue but predicat- global commodity prices. With fresh mul- tion, and so far limited structural re- ed on the new IMF-EFF program remain- tilateral and bilateral inflows, the balance forms, growth will remain below poten- ing on track and on additional external fi- of payments swung from a deficit in FY23 tial, and labor income, employment, and nancing inflows. Continued fiscal restraint to a surplus of 0.8 percent of GDP in FY24. human capital accumulation rates will will dampen aggregate demand, income, International reserves increased to US$10.6 employment, and poverty alleviation. billion at end-FY24, equivalent to 1.9 decrease. Monetary poverty will remain Heavy banking sector exposure to the sov- months of imports, while the Rupee appre- high. Policy uncertainty, limited policy ereign, domestic policy uncertainty, feder- ciated modestly against the U.S. dollar. buffers, and the financial sector pose al-provincial government political mis- Headline inflation decelerated to an aver- substantial risks to the outlook. alignments, and geopolitical instability age of 23.4 percent in FY24 from 29.2 per- pose significant risks. cent in FY23 owing to high base effects, FIGURE 1 Pakistan / Real GDP growth and sectoral FIGURE 2 Pakistan / Actual and projected poverty rates and contributions to real GDP growth real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 7 100 200000 5.8 6.2 6 90 180000 5 80 160000 4 70 140000 2.4 60 120000 3 2 50 100000 1 40 80000 30 60000 0 20 40000 -1 -0.2 10 20000 -2 -0.9 0 0 -3 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 FY2020 FY2021 FY2022 FY2023 FY2024 International poverty rate Lower middle-income pov. rate Agriculture Industry Services GDP Upper middle-income pov. rate Real GDP pc Sources: Pakistan Bureau of Statistics and World Bank staff calculations. Source: World Bank. Notes: see Table 2. MPO 14 Oct 24 currency appreciation, and slower food in- With higher direct taxes and hikes in the policy, elevated inflation, and policy uncer- flation, which lowered price pressures petroleum development levy, total rev- tainty continue to weigh on activity. Limited for the poor, vulnerable, and aspiring enues rose more than non-interest expen- growth in real wages and employment will middle-class households who allocate 42 ditures, contributing to a primary sur- keep the poverty rate near 40 percent to 48 percent of their budgets to food. plus of 0.9 percent of GDP. However, in- through FY26. However, with continued However, energy inflation rose to 65 terest spending rose, crowding out pub- progress on reforms and macroeconomic percent, while core inflation including lic investment. Social protection expen- stability, poverty reduction is expected to transportation remained elevated in rur- ditures increased while development ex- gradually resume. al areas. Higher indirect taxes have also penditures declined, weakening social With high base effects and lower com- driven further price increases for con- service delivery and delaying reductions modity prices, inflation will slow to 11.1 sumer goods and services. These have in alarmingly high stunting and learning percent in FY25 but remain elevated due adversely affected the poor, vulnerable, poverty rates. to higher domestic energy prices, ex- and aspiring middle-class households, pansionary open market operations, and who allocate 23 to 28 percent of their new taxation measures. These price con- budgets to energy, housing, and trans- ditions are likely to exert more pressure portation services. Official remittances Outlook on poor and vulnerable households by rose in nominal terms, but only 3.2 per- limiting real labor income growth to less cent of the poorest households receive The recovery is expected to continue, with than one percent in FY25. On the exter- these directly, while currency appreci- real GDP growth reaching 2.8 percent in nal front, the CAD is forecast to remain ation and high domestic inflation re- FY25, as the economy benefits from the low at 0.6 percent of GDP in FY25 but duced their real value. Depressed eco- availability of imported inputs, easing do- widen as domestic demand recovers. nomic activity in the construction, trade, mestic supply chain disruptions and lower The fiscal deficit is projected to increase to and manufacturing sectors has likely re- inflation. Business confidence will also im- 7.6 percent of GDP in FY25 due to higher duced internal remittance income. With prove with credit rating upgrades, reduced interest payments but gradually decrease slower inflation, the central bank re- political uncertainty, and fiscal tightening in fiscal tightening and falling interest pay- duced the policy rate by a cumulative measures, such as the devolvement of con- ments. Fiscal consolidation will lead to 450 bps to 17.5 percent. stitutionally mandated expenditures to the continued high energy inflation and high- The overall fiscal deficit narrowed by provinces and higher agricultural income er taxes on goods and services, which will 0.9 percentage point to 6.8 percent of taxes. However, output growth will remain worsen monetary poverty, welfare, and GDP in FY24 due to fiscal tightening. below potential as tight macroeconomic human development outcomes. TABLE 2 Pakistan / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2020/21 2021/22 2022/23 2023/24e 2024/25f 2025/26f Real GDP growth, at constant market prices 6.5 4.8 0.0 2.8 2.8 3.2 Private consumption 9.4 7.0 2.6 2.5 2.7 3.3 Government consumption 1.8 -1.3 -3.9 -4.2 6.8 5.8 Gross fixed capital investment 3.7 4.6 -14.9 -2.4 2.6 2.8 Exports, goods and services 6.5 5.9 3.2 2.0 1.3 3.2 Imports, goods and services 14.5 11.0 1.8 -4.0 3.4 4.6 Real GDP growth, at constant factor prices 5.8 6.2 -0.2 2.4 2.8 3.2 Agriculture 3.5 4.2 2.3 6.3 1.9 2.8 Industry 8.2 7.0 -3.7 1.5 3.1 3.2 Services 5.9 6.7 0.0 1.1 3.0 3.3 Inflation (consumer price index) 8.9 12.2 29.2 23.4 11.1 9.0 Current account balance (% of GDP) -0.8 -4.7 -1.0 -0.2 -0.6 -0.7 Net foreign direct investment inflow (% of GDP) 0.5 0.5 0.2 0.4 0.5 0.5 Fiscal balance, including grants (% of GDP) -6.0 -7.8 -7.7 -6.8 -7.6 -7.3 Revenues (% of GDP) 12.4 12.1 11.5 12.5 13.9 12.9 Debt (% of GDP) 77.6 80.6 81.6 72.4 73.8 74.7 Primary balance, including grants (% of GDP) -1.1 -3.1 -0.9 0.9 0.7 -0.1 a,b International poverty rate ($2.15 in 2017 PPP) 5.0 4.2 6.8 7.4 6.9 6.6 a,b Lower middle-income poverty rate ($3.65 in 2017 PPP) 39.5 35.5 40.2 40.5 39.1 38.2 a,b Upper middle-income poverty rate ($6.85 in 2017 PPP) 84.1 81.9 83.0 83.2 82.2 81.7 GHG emissions growth (mtCO2e) 4.6 4.1 2.4 4.1 4.4 4.4 Energy related GHG emissions (% of total) 44.3 44.5 44.0 44.4 45.0 45.5 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Calculations based on SAR-POV harmonization, using 2018-HIES. Actual data: 2018. Nowcast: 2019-2024. Forecasts are from 2024 to 2025. b/ Poverty projections based on microsimulations using 2018-HIES and aggregate macroeconomic indicators (see Barriga-Cabanillas et al (2024), forthcoming). MPO 15 Oct 24 with external creditors continue. House- hold budgets remain stretched due to tax SRI LANKA Key conditions and and price increases, as well as jobs and in- come losses. Real wages contracted by 16.9 challenges and 22 percent between 2021 and 2024, in the private and public sectors, respective- Table 1 2023 The economy has stabilized since late ly. Food insecurity remains high, and Population, million 22.2 2023 following the deep economic crisis. poverty has nearly doubled to 23.4 percent GDP, current US$ billion 84.4 Sri Lanka defaulted in 2022 amid unsus- in 2024. Sustained implementation of key GDP per capita, current US$ 3792.8 tainable debt and depleted reserves, dri- structural reforms—related to fiscal and a 1.0 International poverty rate ($2.15) ven by macroeconomic mismanagement debt management, the financial sector, so- a 11.3 and long-standing structural weaknesses, cial assistance, state-owned enterprises, Lower middle-income poverty rate ($3.65) a 49.3 and exacerbated by exogenous shocks. and trade and investment—will determine Upper middle-income poverty rate ($6.85) Gini index a 37.7 However, reforms implemented since the prospects for medium-term growth School enrollment, primary (% gross) b 96.9 2022, including cost-reflective utility pric- and poverty reduction. b 76.6 ing, new revenue measures, a return to Life expectancy at birth, years prudent monetary policy, and domestic Total GHG emissions (mtCO2e) 34.3 debt restructuring, have helped regain Source: WDI, Macro Poverty Outlook, and official data. a/ Most recent value (2019), 2017 PPPs. macroeconomic stability. Recent developments b/ Most recent WDI value (2022). After contracting by 7.3 percent (year-on- year, y-o-y) in 2022, the economy grew in The economy grew by 5 percent (y-o- the last two quarters of 2023, limiting the y) in H1 2024, driven by a rebound in annual contraction to 2.3 percent. Inflation the industrial sector—particularly in con- moderated to single digits in mid-2023, struction and food and beverage manu- The economy has stabilized with positive down from a peak of 69.8 percent (y-o-y) in facturing—as well as strong performance growth, low inflation, a steady exchange September 2022. The rupee appreciated by in tourism-related services. Private con- rate, and improved fiscal and external 10.8 percent (y-o-y) in 2023 after sharply sumption remained weak as household balances amid the debt service suspen- depreciating by 81.2 percent the year be- disposable incomes continued to be de- fore. Due to the recovery of tourism re- pressed. Labor force participation contin- sion. However, poverty and inequality re- ceipts and remittances and increased in- ued to decline (from 49.9 percent in Q1 main high. Continued macro stability flows from development partners, usable 2023 to 47.1 percent in Q1 2024). Food in- hinges on policy consistency and the suc- official reserves increased to US$3.0 billion security was widespread, with 23.7 per- cessful completion of the external debt re- (equivalent to 2.1 months of imports) by cent of households being food insecure structuring. Prospects for medium-term end-2023, compared to US$500 million at and 26 percent of households consuming end-2022. In June 2024, the International an inadequate diet in 2023. growth and poverty reduction depend on Monetary Fund successfully completed Headline inflation, measured by the Colom- the design and sustained implementation the second review of the Extended Fund bo Consumer Price Index, remained in the of key structural reforms. Facility program. low single digits throughout 2024 (0.5 per- Despite progress, external debt servicing cent, y-o-y, in August 2024), supported by remains suspended while negotiations downward adjustments in administered FIGURE 1 Sri Lanka / Real GDP growth and contributions to FIGURE 2 Sri Lanka / Actual and projected poverty rates real GDP growth (production side) and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 6 80 700000 4 70 600000 2 0 60 500000 -2 50 -4 400000 -6 40 -8 300000 30 -10 200000 -12 20 -14 10 100000 1Q 2022 3Q 2022 1Q 2023 3Q 2023 1Q 2024 0 0 Agriculture Construction Food & beverage mfg. Other industries 2009 2011 2013 2015 2017 2019 2021 2023 2025 Accommodation Other services International poverty rate Lower middle-income pov. rate Net taxes Overall growth Upper middle-income pov. rate Real GDP pc Sources: Department of Census and Statistics and World Bank calculations. Source: World Bank. Notes: see Table 2. Note: Food and beverage manufacturing includes production of tobacco products and accommodation includes food and beverage services. MPO 16 Oct 24 prices, currency appreciation, and im- The primary surplus, achieved in 2023, and continued fiscal consolidation are ex- proved supply conditions, whilst de- strengthened further in the first six months pected to reduce the overall fiscal balance mand remained subdued. With inflation of 2024, as new measures, including an in- in the medium term. well below target, the central bank main- crease in the VAT rate and removal of VAT While recent economic performance has tained an accommodative stance, cutting exemptions, led to a 42.6 percent increase been sound, macroeconomic stability re- policy rates by 75 basis points (bps) be- in tax revenues, while expenditures re- mains fragile and is predicated on the tween March and July 2024 (a cumula- mained tightly controlled. The overall fis- consistent implementation of key fiscal, tive 725 bps reduction since May 2023), cal deficit declined as the interest bill fell, financial, and monetary policies. Given pushing commercial bank lending and driven by lower borrowing costs. limited fiscal and external buffers, how- deposit rates downwards. Despite this, ever, downside risks remain high. These growth in credit to the private sector re- include a protracted or insufficiently deep mained sluggish at 6.9 percent in July debt restructuring, policy uncertainty (in- 2024 (y-o-y). Outlook cluding direction and pace of policy re- The merchandise trade deficit increased by form and the potential fiscal impact of 18.3 percent (y-o-y) in the first seven Faster-than-expected macroeconomic sta- electoral promises), and medium-term months of 2024 as import demand grad- bilization has improved the short-term scarring effects of the crisis. Financial sec- ually recovered. However, increased growth outlook to 4.4 percent (y-o-y) in tor risks need to be carefully monitored tourism receipts (66.1 percent, y-o-y) and 2024. Continued implementation of struc- as elevated non-performing loans and remittances (11 percent, y-o-y) in the first tural reforms will, however, be key to rais- high exposure to the sovereign hinder fi- eight months, the continued suspension of ing the medium to long-term growth po- nancial sector stability. Poverty outcomes debt servicing, and inflows from develop- tential. Poverty (below $3.65 per person will hinge on reform design and sequenc- ment partners contributed to a balance of per day, 2017 PPP) is expected to decline ing, as well as the adequacy and targeting payment surplus during this period. As gradually but remain above 20 percent un- of compensating transfers. Inequality is a result, usable official reserves increased til 2026. Inflation is likely to remain below estimated to remain high and increases to US$4.5 billion (equivalent to 3 months the central bank’s target of 5 percent in in stunting and malnutrition are expected of imports) by the end of August 2024, 2024, and gradually increase towards the to increase spatial and intergenerational and net foreign assets of the banking sys- medium-term target as demand picks up. inequalities in the absence of compensat- tem turned positive in May 2024 for the The current account is projected to remain ing mechanisms and sustained growth. first time in four years. With improved in surplus in 2024, driven by tourism and On the upside, a strong and sustained im- foreign exchange liquidity, the rupee ap- remittances, and with the restriction on im- plementation of the structural reform pro- preciated by 7.3 percent between January porting personal vehicles only being gram could boost confidence and attract and August 2024. phased out from 2025. Debt restructuring fresh capital inflows. TABLE 2 Sri Lanka / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2021 2022 2023 2024e 2025f 2026f Real GDP growth, at constant market prices 4.2 -7.3 -2.3 4.4 3.5 3.1 Private consumption 2.7 -0.5 -1.6 2.2 2.6 2.9 Government consumption -2.8 1.4 -5.4 -0.1 2.4 1.8 Gross fixed capital investment 6.5 -24.5 -8.4 14.0 7.0 4.6 Exports, goods and services 10.1 10.2 12.0 4.3 3.6 3.4 Imports, goods and services 4.1 -19.9 6.5 4.7 3.9 3.7 Real GDP growth, at constant factor prices 3.9 -7.0 -2.6 4.4 3.5 3.1 Agriculture 1.0 -4.2 2.6 1.5 1.5 1.5 Industry 5.7 -16.0 -9.2 10.4 6.4 4.1 Services 3.4 -2.6 -0.2 2.3 2.5 2.9 Inflation (consumer price index) 6.0 46.4 17.4 3.0 4.5 5.1 Current account balance (% of GDP) -3.7 -2.0 1.8 .. .. .. Net foreign direct investment inflow (% of GDP) 0.7 1.2 0.8 -0.9 -1.0 -1.0 a International poverty rate ($2.15 in 2017 PPP) 1.5 4.1 5.2 4.3 3.5 3.3 a Lower middle-income poverty rate ($3.65 in 2017 PPP) 13.1 22.7 25.9 23.4 21.3 20.1 a Upper middle-income poverty rate ($6.85 in 2017 PPP) 51.2 64.4 66.6 64.3 63.3 62.0 GHG emissions growth (mtCO2e) 1.2 -5.8 -2.4 6.2 6.1 5.9 Energy related GHG emissions (% of total) 59.7 57.8 56.2 58.5 60.7 62.7 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. Notes: e = estimate, f = forecast. a/ Calculations based on SAR-POV harmonization, using 2019-HIES. Actual data: 2019. Nowcast: 2020-2023. Forecasts are from 2024 to 2026. MPO 17 Oct 24 Macro Poverty Outlook 10 / 2024