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Trump’s Tariff Impact Slows Global Growth, Warns World Bank

June 11, 2025, 1:54 pm

Trump’s tariff has had an immense impact on global growth, and it is now undeniable, according to the World Bank’s latest forecast. The global economy is on track to experience its slowest decade since the 1960s, as rising tariffs and unpredictable trade policies continue to destabilise financial markets and disrupt investor confidence.

Global Growth Forecasts Plunge Amid Trade Tensions

The World Bank’s twice-yearly report reveals a grim outlook. Nearly two-thirds of countries have had their growth projections slashed compared to January’s predictions. Global growth is now expected to hit just 2.3% in 2025, 0.4% lower than earlier forecasts, and only 2.6% by 2027. Economists at the bank directly attribute this slowdown to Trump’s tariff impact, which intensified following a blanket 10% tariff on all U.S. imports and additional duties on steel and aluminium.

Markets reacted swiftly. The tariffs, introduced shortly after Trump took office, led to significant financial volatility. Although an international trade ruling declared most of the measures illegal, a U.S. appeal has allowed them to remain for now. The World Bank has since downgraded U.S. growth expectations for 2025 and 2026, citing declining consumer spending and faltering investor sentiment.

Trump’s Tariff Impact Triggers Economic Instability Worldwide

Despite the bleak U.S. forecast, China’s outlook remained steady. The World Bank noted that China possesses a stronger financial cushion to endure what it called “significant headwinds.” However, the broader global context remains volatile. Trump tariffs continue to impact global growth and intensify due to frequent policy shifts and escalating trade barriers.

The research suggests that more tariff increases might “seize up” international commerce, leading to market panic and overall unpredictability. The bank provides a probability of a recession, but it places the odds of one happening at less than 10%. Meanwhile, as supply chains suffer under the increased constraints, inflation risks are rising.

The Organisation for Economic Co-operation and Development (OECD) echoed similar concerns, cutting its global growth outlook to 2.9% from a prior estimate of 3.1%. As trade talks between the U.S. and China resume in London, the world watches anxiously for signs of stability.

World Bank Clarifies Role in Indus Treaty: ‘We’re Just a Facilitator’

May 9, 2025, 2:30 pm

In a major diplomatic turn, the World Bank has strongly disassociated itself from news that it would mediate India’s decision to put on hold the Indus Water Treaty (IWT) with Pakistan. The refusal is a setback to Islamabad, which had promised to take its protest to the international financial institution after India described the move as “unilateral and illegal.”

World Bank Clarifies Its Role

Against the backdrop of increased tensions between the two neighbours, World Bank President Ajay Banga has made it categorically clear that the institution will play only its chartered role under the treaty. “There’s a lot of speculation in the media about how the World Bank will step in & fix the problem but it’s all bunk. The World Bank’s role is merely as a facilitator,” Banga was quoted by India’s Press Information Bureau (PIB). This clarification serves to shut the door on Pakistan’s hopes of employing the World Bank as leverage to turn around India’s position.

“We have no role to play beyond a facilitator. There’s a lot of speculation in the media about how the World Bank will step in & fix the problem but it’s all bunk. The World Bank’s role is merely as a facilitator,” World Bank President, Ajay Banga on Indus Waters Treaty… pic.twitter.com/s19jkAl7WG

— ANI (@ANI) May 9, 2025

India Responds After Kashmir Terror Attack

India suspended the treaty after a terror attack in Jammu and Kashmir that claimed 26 civilians’ lives. The Indian government cited “irrefutable proof” of Pakistani nationals’ participation in the attack.

Consequently, New Delhi not only suspended the treaty but also took other stringent diplomatic actions, such as closing the Attari-Wagah border, cancelling visas for Pakistani nationals, and expelling military officials from its soil.

India’s Long History of Adherence to the Treaty

Indian Foreign Secretary Vikram Misri, in a news conference on May 8, stated that India was forced into action following a series of provocations and hindrances by Pakistan. “We sent several letters to them, requesting for negotiation to discuss modification of this treaty. India has, for six plus decades, honoured this treaty,” Misri stated. He further added, “Pakistan is the one which has been acting in violation of this treaty. Pakistan is the one acting in violation of treaty, deliberately creating roadblocks in India exercising its legitimate rights over the western rivers.”

Understanding the Indus Water Treaty

The IWT, which was originally facilitated by the World Bank in 1960, clearly specified the division of the Indus River system. Accordingly, India was assigned complete rights to the Eastern rivers — Ravi, Beas, and Sutlej — while Pakistan, on the other hand, was awarded the Western rivers — Indus, Jhelum, and Chenab. The treaty does permit India some rights to the Western rivers for non-consumptive purposes like domestic use, farming, and hydroelectric projects, but forbids large-scale storage.

Despite this, India has traditionally respected the provisions. Yet, New Delhi authorities claim that Islamabad has consistently breached the spirit of the deal and used legal and procedural means to inhibit legitimate Indian projects.

World Bank Sanctions $108M to Pakistan to Empower Women in Khyber Pakhtunkhwa

May 1, 2025, 3:03 pm

In a major step towards improving socio-economic conditions in northwest Pakistan, the World Bank has approved an extra $108 million to improve infrastructure, access to basic services, and economic opportunities, especially for women and girls, in Khyber Pakhtunkhwa province.

The new funds, which have been approved, will be spent on two big projects: the Khyber Pakhtunkhwa Rural Accessibility Project (KPRAP) and the Khyber Pakhtunkhwa Integrated Tourism Development (KITE) project. The KPRAP will get $78 million, while the KITE project will get $30 million.

Constructing Climate-Resilient Roads to Link Communities

According to the World Bank, the intention is to enable the province to develop climate-resilient infrastructure that enhances connectivity to markets, schools, healthcare, and employment. Such development is particularly vital for increased female and girl-child participation in the economy as well as access by them to increased connectivity benefits.

“The project is important to upgrade the lives of the people of the province, especially women and girls, by better connecting them to basic services and economic opportunities,” Task Team Leader of the project Muhammad Bilal Paracha said.

The KPRAP’s $78 million will be used to upgrade and rehabilitate rural road networks to make them safe and climate-resilient. The upgrades are meant to link remote communities with essential services and enhance mobility in underdeveloped regions.

Enhancing the Province’s Tourism Industry in Pakistan

Concurrently, KITE project’s additional financing worth $30 million will reinforce the tourism infrastructure in Khyber Pakhtunkhwa. The additional finances will support finishing off the overhaul of two prominent highways leading towards the picturesque tourism locations of the province, to help facilitate national as well as foreign tourism.

“This extra funding reiterates the World Bank’s assurance for ensuring the development objectives of Pakistan and the province of Khyber Pakhtunkhwa,” added Paracha.

The project is an expression of an overall strategy by global stakeholders to assist Pakistan in acquiring resilience against natural disasters, poverty alleviation, and inclusive growth along gender lines.

World Bank Responds to India’s Suspension of the Indus Waters Treaty

April 27, 2025, 2:05 pm

The World Bank has reacted to India’s recent suspension of the Indus Waters Treaty with Pakistan by pointing out that its mandate is confined to certain roles spelled out in the treaty. The World Bank, as a guarantor, never interferes in the sovereign choices of its member countries.

India’s suspension of the treaty, after a terrorist attack in Jammu and Kashmir, has escalated tensions between the two countries. Whereas the World Bank stays neutral in the matter, the suspension signifies important issues concerning regional water security and the dangers of further conflict.

World Bank responds to India suspending Indus Waters Treaty with Pakistan

Days after India suspended Indus Waters Treaty with Pakistan following the terror attack in Pahalgam, a World Bank spokesperson said that it was a “signatory to the treaty for a limited set of defined… pic.twitter.com/wVTqS5ztJU

— Indian Infra & Geopolitics (@INDTechAndInfra) April 27, 2025

World Bank’s Role in the Indus Waters Treaty

The World Bank helped broker the Indus Waters Treaty in 1960. It divided the Indus River and its tributaries between India and Pakistan. India controls the three eastern rivers—Beas, Ravi, and Sutlej—while Pakistan controls the western rivers—Indus, Chenab, and Jhelum. Despite political tensions, the treaty has supported cooperation over shared water resources.

As guarantor of the treaty, the World Bank oversees its enforcement, extends financial assistance, and assists in the resolution of conflicts. It keeps away, though, from political and security issues. The spokesperson for the World Bank affirmed that it never comments on sovereign choices made by member nations.

India’s Suspension and Political Context

India froze the treaty following a fatal terrorist attack in Pahalgam, Jammu and Kashmir, that claimed 26 lives. The Indian government attributed the freeze to Pakistan’s purported backing of cross-border terrorism, terming it a national security issue. Indian officials also feared that Pakistan could exploit water as a weapon as tensions rose in Kashmir.

Pakistan denounced the action as illegal. Pakistani officials cautioned that any water supply disruption could be interpreted as an act of war. They added the suspension would merely raise tensions, further destabilizing the region, which has had a history of military conflict.

Regional Stability and the World Bank’s Role

India’s suspension is a significant escalation of the already tense relationship between the two nations. Water is crucial to both countries’ economies and diplomatic stability. Pakistan’s agricultural economy, which depends on the Indus River, is severely threatened if the treaty is not reinstated.

Though the World Bank has said it cannot become directly involved in the conflict, increasing tensions may induce the international community to become more involved in mediating the situation. The World Bank, as the initial broker of the treaty, may then be asked to assist in de-escalation.

India’s suspension of the Indus Waters Treaty has severe geopolitical implications. Although the World Bank has asserted its impartial position, its past involvement may still contribute to containing the fallout. The global community needs to keep a close eye on the situation, as extended water conflicts may further destabilize the region.

Who is Poonam Gupta? Meet RBI’s Newly Appointed Deputy Governor

April 3, 2025, 6:02 pm

Respected economist and erstwhile World Bank and IMF official Poonam Gupta becomes RBI’s Deputy Governor, bringing in international know-how to India’s economy.

In a significant development, the Indian government has appointed renowned economist Poonam Gupta as the new Deputy Governor of the Reserve Bank of India (RBI) for a three-year term. With decades of experience in international finance and economic policymaking, Gupta’s appointment comes at a crucial time, just days before the RBI’s Monetary Policy Committee (MPC) meeting scheduled for April 7-9.

डॉ. पूनम गुप्ता को उप गवर्नर, भारतीय रिज़र्व बैंक के रूप में नियुक्त किया गया
Dr. Poonam Gupta appointed as Deputy Governor, Reserve Bank of Indiahttps://t.co/2CuOLyVJ2N

— ReserveBankOfIndia (@RBI) April 3, 2025

Presently, she is the Director General of the National Council of Applied Economic Research (NCAER), a prominent economic policy think tank. She succeeds Michael Patra, a seasoned central banker who was the Deputy Governor from January 2020 to January 2025.

Who is Poonam Gupta? A Look at Her Journey

Poonam Gupta has significant experience in economic policy, international finance, and macroeconomic stability. She has headed research on central banking, public debt, economic growth, and state finances as the director of NCAER. Her background in these fields makes her an important figure in advising India’s financial policies at the RBI.

Before joining NCAER in 2021, Gupta served in senior positions at the International Monetary Fund (IMF) and the World Bank for almost two decades. While working in Washington, DC, she worked on economic policies for emerging markets, developing a profound understanding of global finance. She has also been a part of government advisory committees in India, being a member of the Economic Advisory Council to the Prime Minister and convener of the Advisory Council to the 16th Finance Commission.

Her work also included India’s G20 Presidency, where she was the chairperson of the Task Force on Macroeconomics and Trade.

Academic and Research Contributions

Gupta’s academic experience is also of a high caliber. She has worked at top-ranking institutions like the Delhi School of Economics and the University of Maryland (USA) and was a visiting faculty at the Indian Statistical Institute (ISI), Delhi. She has also served in leadership roles as RBI Chair Professor at the National Institute of Public Finance and Policy (NIPFP) and the Indian Council for Research on International Economic Relations (ICRIER).

A prolific writer, Gupta has published close to 50 research papers, several of which have appeared in leading international journals such as The Economist, The Financial Times, and The Wall Street Journal. She co-authored a book on India and China with economist Barry Eichengreen and was awarded the EXIM Bank award in 1998 for her research acumen.

Poonam Gupta is academically qualified with a PhD in Economics, majoring in macroeconomics, international finance, and trade. She also has a dual master’s degree in Economics from the University of Maryland and Delhi School of Economics, as well as a bachelor’s degree from Hindu College, University of Delhi.

Challenges Ahead: Inflation, Economic Growth, and Policy Reforms

Gupta’s appointment occurred at a moment when India had serious economic issues. The economy, while having been estimated to have expanded 6.5% in the fiscal year ending March 31, still lags behind the 9.2% expansion seen in the last fiscal year. At the same time, inflationary pressure and geopolitical risks remain on the horizon.

She has spoken out for a re-examination of India’s inflation-targeting system. In a column after a rate reduction in February, she said, “RBI has been pursuing an old inflation figure and has frequently missed its projection by a wide margin. Inflation expectations of households have continued to be misaligned, and monetary policy transmission has not picked up sufficiently.”

In another column in March, she wrote that the RBI must not indulge in undue exchange rate volatility but that the rupee must be allowed to move more freely than previously. Her views will be important as the MPC sits next week to debate monetary policy actions.

Strengthening the RBI Leadership

With the appointment of Gupta, the RBI has four Deputy Governors, in addition to M Rajeshwar Rao, T Rabi Sankar, and Swaminathan J. Her inclusion adds a worldwide angle to the central banking system of India, as consistent with the changing financial landscape of the nation.

Her deep expertise in macroeconomics, along with her extensive research and advisory experience, makes her a formidable force in shaping India’s monetary policy. As the country embarks on economic revival, Gupta’s views will play a crucial role in tackling inflation, maintaining financial stability, and guiding growth-driven reforms.

Can Pakistan Become a $1 Trillion Economy by 2035? Challenges and Hopes

January 27, 2025, 4:42 pm

Martin Raiser, World Bank Vice President for South Asia, recently stated that Pakistan could achieve a $1 trillion economy by 2035 if it implements the right reforms and maintains a 7% annual growth rate. The World Bank has offered a potential $20 billion commitment over the next decade to aid the nation’s recovery, but this promise comes with strict conditions.

Raiser emphasized the importance of focusing on key sectors such as clean energy, agriculture, manufacturing, and digital infrastructure. However, the World Bank’s support depends on Pakistan’s ability to implement meaningful reforms to unlock this funding.

Structural Challenges Hinder Progress

Despite the World Bank’s optimism, Pakistan’s current economic situation presents significant hurdles:

Economic Crisis: Pakistan’s GDP growth fell to just 2.4% in 2023, below the population growth rate of 2.6%, worsening poverty levels.
Tax Collection Issues: With a tax-to-GDP ratio of only 12%, the country struggles to generate adequate revenue.
Debt and Spending: Unsustainable fiscal imbalances and inefficient spending continue to drag the economy down.

World Bank’s Funding Conditions

The World Bank recently canceled a $500 million loan meant for sustainable energy projects after Pakistan failed to meet conditions, such as revising power purchase agreements under the China-Pakistan Economic Corridor (CPEC). This move signals the institution’s reluctance to offer further assistance without substantial reforms.

IMF Bailouts and Overreliance on External Aid

Pakistan has long depended on external aid, securing its 25th IMF bailout worth $7 billion in 2023. While this provides short-term stability, it fails to address deep-rooted problems like slow growth, high unemployment, and the brain drain.

The IMF’s plan focuses on raising taxes and cutting subsidies, but these measures don’t tackle inefficient governance or structural issues. Over 50% of Pakistan’s budget is spent on interest payments, worsening the debt crisis.

Dependence on Chinese Loans

Pakistan’s reliance on Chinese debt is another major challenge. China holds $23.6 billion in bilateral debt, accounting for over 28% of Pakistan’s external debt.

The IMF has urged Pakistan to stop offering tax incentives to Chinese companies under CPEC, further complicating its financial position. Chinese investments in Pakistan have also declined, adding uncertainty to future economic projects.

Can Pakistan Break the Cycle of Bailouts?

To achieve long-term economic growth, Pakistan must move beyond temporary solutions like bailouts and focus on:

Reforming the energy sector.
Diversifying exports.
Reducing debt dependency.
Strengthening governance and fiscal policies.

Hope vs. Reality

While the World Bank’s optimism is encouraging, Pakistan’s path to a $1 trillion economy is riddled with challenges. Without strong political will and comprehensive reforms, the country risks remaining stuck in a cycle of short-term fixes and long-term stagnation.

World Bank Approves Historic USD 20 Billion Package for Pakistan

January 5, 2025, 3:53 pm

A USD 20 billion indicative lending package for Pakistan is set to be approved by the World Bank. This comes as part of a groundbreaking 10-year initiative aimed at protecting funded projects from political transitions. The program is titled “Pakistan Country Partnership Framework 2025-35.” The aim of this program is to address critical social indicators in neglected areas, according to a media report.

Key Focus Areas Partnership Framework

The framework focuses on six targeted areas. Reducing child stunting, combating learning poverty, enhancing climate resilience, decarbonizing the environment, expanding fiscal space, and boosting private investment to improve productivity. These areas have broad support across the political spectrum. The areas are expected to remain unaffected by government changes over the 2025-2035 period.

Approval and Significance of the Package

The World Bank board is scheduled to approve the Pakistan Country Partnership Framework on January 14. The World Bank’s Vice President for South Asia, Martin Raiser is expected to visit Islamabad following the approval. The planning framework aims to shield the program from the country’s volatile political landscape and prevent fragmentation of the World Bank portfolio due to government changes.

Breakdown of the USD 20 Billion Lending Package

According to official documents, the World Bank’s total indicative lending envelope for fiscal years 2025 to 2035 will amount to approximately USD 20 billion. Of this, the International Development Association (IDA) will contribute USD 14 billion. The remaining USD 6 billion will come from the International Bank for Reconstruction and Development (IBRD). These loans will be subject to the evolution of IDA funding, Pakistan’s standing and performance, and its debt vulnerability indicators.

The framework also aims to support an additional USD 20 billion in private lending through the World Bank’s International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). This brings the total package to USD 40 billion, though the official loans to the government of Pakistan will remain at USD 20 billion.

Focus on High-Impact Sectors

The new lending strategy will focus on six high-impact areas that enjoy strong political support in Pakistan. The World Bank will phase out lending in less impactful sectors. These areas are transport, power transmission, telecoms, tertiary healthcare, and higher education. The emphasis will be on larger projects, more frequent scale-ups, and fewer pilots and one-off operations.

Shift in World Bank’s Strategy

The World Bank’s new strategy represents a shift from short-term macro-fiscal adjustment programs to more selective, stable, and larger investments in critical areas for sustained development and growth. Both sides will support the implementation of the 10-year framework with rolling two-year business plans.

Pakistan Gets USD 330M Loan From Asian Development Bank

December 15, 2024, 12:58 pm

The Pakistan government signed a USD 330 million loan agreement with the Asian Development Bank (ADB) on Saturday. This funding will support the Integrated Social Protection Development Programme (ISPDP). Economic Affairs Secretary Kazim Niaz and ADB Country Director Emma Fan were present at the signing, as reported.

Niaz emphasized the significance of the loan, stating it would strengthen institutional capacity and improve access to education and healthcare services. “This support will help us expand critical services for the people,” he said.

In response, Emma Fan reiterated ADB’s commitment to assisting Pakistan. She highlighted that the loan would promote inclusive growth, reduce poverty, and improve healthcare access for vulnerable groups. “It will improve healthcare access for vulnerable populations,” she added.

World Bank Cancels $500 Million Loan

In contrast, Pakistan faced a setback when the World Bank canceled a $500 to $600 million loan. This cancellation followed Pakistan’s failure to meet essential conditions, including revising power purchase agreements under the China-Pakistan Economic Corridor (CPEC), according to reports.

The loan was part of the Affordable and Clean Energy Program (PACE-II), which the World Bank approved in 2021. While the first $400 million tranche was released, the second tranche was contingent on renegotiations with Independent Power Producers (IPPs), especially Chinese plants under CPEC.

No Progress on CPEC Power Plant Agreements

Moreover, Pakistani officials acknowledged that no progress was made in renegotiating agreements with CPEC-related power producers. Chinese authorities have repeatedly rejected reopening these deals, including restructuring Pakistan’s $16 billion energy debt. Consequently, the World Bank canceled the loan.

Impact on Pakistan’s Financial Situation

Furthermore, the World Bank announced it will not offer any new budget support loans this fiscal year. This decision will impact Pakistan’s expectations of securing $2 billion in fresh loans. Pakistan has now nearly exhausted its loan quota with the World Bank.

Despite the ADB loan, these financial challenges highlight the urgent need for Pakistan to address issues within its energy sector and rebuild relationships with international lenders.

World Bank Pledges Record $100 Billion Aid For Global Poverty Fight

December 6, 2024, 4:23 pm

The World Bank has announced it raised nearly $24 billion to support some of the world’s poorest countries, leveraging this amount to generate an unprecedented $100 billion in total spending capacity. This funding, part of the International Development Association (IDA), marks an increase from the $23.5 billion pledged three years ago, according to a spokesperson.

By borrowing on financial markets, the Bank multiplies the funds by four, unlocking $100 billion for new loans and grants, surpassing the $93 billion mobilized in 2021. “We believe the historic success of this IDA21 replenishment is a vote of confidence and support from donors and clients,” the World Bank noted.

This funding will benefit 78 eligible nations, aiding investments in key sectors like health, education, infrastructure, and climate resilience, said World Bank President Ajay Banga. He emphasized its role in stabilizing economies and creating jobs.

The announcement follows discussions in Seoul, South Korea, where political tensions remain high after President Yoon Suk Yeol’s recent declaration of martial law, which was later rescinded under legislative pressure.

Also Read: Pakistan Partners With World Bank To Combat Smog Crisis

IDA has been instrumental in providing concessional climate finance, with two-thirds of its funding in the past decade allocated to African nations. Contributions to the IDA replenishment cycle, held every three years, primarily come from the U.S., Japan, and European countries.

This year, the U.S. pledged a record $4 billion, while nations like Norway and Spain also significantly increased contributions. Former IDA beneficiaries, including South Korea and China, now participate as donors, reflecting their economic progress.

‘India’s Growing Economy’: Sitharaman Says US And China Can’t Overlook Economic Might

October 24, 2024, 6:42 am

Union Finance Minister Nirmala Sitharaman emphasized India’s growing global influence, underscoring that with one in every six persons in the world being Indian, the country’s economy and capabilities cannot be overlooked. She made these remarks during a panel discussion on “Bretton Woods Institutions at 80: Priorities for the Next Decade,” organized by the Center for Global Development on the sidelines of the World Bank and IMF Annual Meetings 2024.

India’s Rising Global Role

Sitharaman stressed that no country, including distant nations like the United States or neighboring powers like China, can afford to ignore India. She attributed this to India’s vast population, rapidly growing economy, and the country’s expertise in various sectors. “Today, one in every six people in the world is Indian. You cannot ignore our economy and the way it is growing,” she stated.

HAVE A LOOK AT THE VIRAL POST:

Union Minister for Finance and Corporate Affairs Smt. @nsitharaman participates in a discussion on the ‘Bretton Woods Institutions at 80: Priorities for the Next Decade’, organised by the Center for Global Development @CGDev on the sidelines of the World Bank and IMF… pic.twitter.com/AuaOeSVOw0

— Ministry of Finance (@FinMinIndia) October 23, 2024

Sitharaman pointed to India’s skilled workforce, which plays a pivotal role globally, from running large corporations to managing complex systems. She also highlighted India’s technological leadership, particularly in areas like refining systems and banking, which further cements the country’s indispensable role in global affairs.

Support for Multilateral Institutions

Sitharaman reiterated India’s long-standing support for multilateral institutions like the World Bank and IMF, stressing that India never aimed to undermine these entities. However, she expressed concern about their current relevance, citing the diminishing effectiveness of multilateral institutions in providing solutions.

India, she noted, has always championed strategic and peaceful multilateralism, adding, “We see the hope and the expectations pinned on multilateral institutions fissure away because we think no solutions are coming out of them.”

The Need for Reform and Information Sharing

The Finance Minister called for these institutions to step up, urging them to leverage their wealth of information and expertise to share timely insights with countries. Sitharaman emphasized the need for these organizations to help build strong institutions globally, rather than tearing them down, as part of a strengthened commitment to multilateralism.

Sitharaman also stressed the role of the Bretton Woods institutions in shaping the future, rather than merely reacting to it. “Shaping the future is an ambitious goal, and we need Bretton Woods institutions to work on that, rather than reacting to future developments,” she remarked.

India’s Contributions to Global Initiatives

Highlighting India’s contributions to global efforts, Sitharaman mentioned several initiatives, including the International Solar Alliance, the Biofuel Alliance, and disaster-resilient infrastructure. These initiatives, she noted, require significant funding and international cooperation, especially for smaller and island economies.

India’s digital public infrastructure, which has been publicly funded and shared with other countries, is a prime example of how India is contributing to global development, according to Sitharaman.

In her closing remarks, Sitharaman reiterated India’s commitment to multilateralism and urged the Bretton Woods institutions to strengthen themselves for the global good. She stressed the importance of information sharing and proactive leadership in shaping the future.

Sitharaman’s visit to Washington, DC, was part of her larger trip to the United States, where she was welcomed by India’s Ambassador to the US, Vinay Kwatra, after arriving from New York.

Punjab cabinet focuses on dam management ahead of Panchayat Elections

October 9, 2024, 3:54 am

The Punjab government convened a cabinet meeting today in Chandigarh, just ahead of the upcoming panchayat elections. This meeting marked a significant occasion as it was the first since the recent reshuffle of five ministers, highlighting the government’s renewed focus on addressing pressing issues in the state. Originally scheduled to take place in Jalandhar, the location was shifted to Chandigarh for undisclosed reasons, reflecting the government’s adaptive approach to logistics.

The meeting commenced at 2 PM at the Chief Minister’s residence and continued for approximately one and a half hours. During this time, cabinet members engaged in discussions on various critical topics, with a particular emphasis on the management and cleanliness of 14 dams across the state. This initiative aims to enhance the safety and environmental sustainability of these vital water resources, which play a crucial role in agriculture and local ecosystems.

Following the meeting, Cabinet Minister Aman Arora addressed the media, providing detailed insights into the decisions made during the discussions. He announced a comprehensive plan worth Rs 281 crore aimed at improving the maintenance and cleanliness of the dams. As part of this plan, the government intends to secure a loan of Rs 200 crore from the World Bank, underscoring its commitment to infrastructure development and environmental management. Additionally, the state government will contribute 30% of the total project cost, demonstrating a proactive stance in resource allocation.

Arora emphasized the importance of this initiative, stating that it reflects the government’s dedication to ensuring the safety and cleanliness of dams, which are essential for the well-being of local communities and agricultural activities. The decision to focus on dam management comes at a crucial time, as the state prepares for elections and seeks to demonstrate its commitment to public welfare.

This cabinet meeting held added significance as it was the first for the newly appointed ministers, allowing them to familiarize themselves with the ongoing initiatives and challenges facing the government. The previous cabinet meeting took place on September 2, where the government made headlines by raising VAT on petrol and diesel, a decision that has placed an additional financial burden on residents and sparked discussions about economic management.As the government gears up for the panchayat elections, the outcomes of today’s meeting may play a pivotal role in shaping public perception and confidence in the administration’s ability to address key issues affecting the state. With the focus on infrastructure and public welfare, the Punjab government aims to demonstrate its responsiveness to the needs of its citizens.

India Losing Manufacturing Edge To Rivals like Bangladesh, Vietnam: World Bank

September 3, 2024, 10:20 pm

India’s share in global trade has not kept up with its rapidly growing economy, causing the country to lose its competitive edge in manufacturing exports to smaller rivals like Bangladesh and Vietnam, according to a new report from the World Bank. The report highlights concerns over India’s declining trade in goods and services as a percentage of its GDP.

Decline in India’s Global Trade Share

The World Bank’s report points out that while India’s economy has expanded significantly, its share of global trade, particularly in manufacturing, has been decreasing over the past decade. The country’s global export share in key sectors such as apparel, leather, textiles, and footwear grew from 0.9% in 2002 to a peak of 4.5% in 2013, but this figure has since dropped to 3.5% in 2022. In contrast, Bangladesh’s share in these sectors reached 5.1%, while Vietnam’s stood at 5.9% in 2022.

Challenges and Opportunities

The World Bank suggests that India needs to address several challenges to regain its competitiveness. This includes lowering trade costs, reducing tariff and non-tariff barriers, and revising trade agreements. Nora Dihel, a senior economist at the World Bank, emphasized the need for immediate action, stating, “This is a call to action for India to focus on these areas.”

Government’s Manufacturing Ambitions

Prime Minister Narendra Modi aims to position India as a global manufacturing hub, especially as businesses diversify their supply chains away from China. The Indian government has invested billions in subsidies to attract investments in industries such as electronics and chip-making. However, India’s export sectors are increasingly capital-intensive and are not absorbing the millions of jobless individuals in the country. The World Bank estimated that employment related to exports fell from 9.5% of total domestic employment in 2012 to 6.5% in 2020.

Future Growth Outlook

Despite these challenges, the World Bank remains optimistic about India’s economic growth. It expects the economy to grow at a robust pace of 7% in the current fiscal year, with growth likely to average 6.7% in the subsequent years.

World Bank Revises India’s FY25 Growth Rate To 7% From 6.6%

September 3, 2024, 4:57 pm

The World Bank has increased its growth forecast to 7% for the financial year 2024-25, up from the previous estimate of 6.6%. This adjustment underscores India’s robust economic performance, having been the fastest-growing major economy in FY24 with an impressive growth rate of 8.2%.

“India was the fastest growing economy in FY24 at 8.2%, and now it’s growing at a good pace,” commented Auguste Tano Kouame, the World Bank’s Country Director for India. He pointed out that while global growth remains sluggish compared to pre-pandemic levels, India’s economy continues to show strong momentum.

Looking ahead, the World Bank anticipates that India’s growth will remain positive in the medium term, with strong projections for FY26 and FY27. Kouame emphasized the importance of diversifying India’s export basket and leveraging global value chains to meet the ambitious target of $1 trillion in merchandise exports by 2030.

“India needs to diversify its export basket and leverage global value chains to reach $1 trillion in merchandise exports by 2030,” Kouame stressed.

Fiscal Health and Trade Policies

The World Bank also forecasts a gradual reduction in India’s debt-to-GDP ratio, predicting it will decrease from 83.9% in FY24 to 82% by FY27. Additionally, the current account deficit is expected to remain between 1% and 1.6% of GDP up to FY27.

Kouame highlighted India’s proactive approach to free trade agreements as a significant factor contributing to its economic resilience. “India has had a proactive approach to free trade agreements,” he noted.

He further added, “India’s robust growth prospects along with declining inflation will help to reduce extreme poverty. India can boost its growth further by harnessing its global trade potential. In addition to IT, business services, and pharma where it excels, India can diversify its export basket with increased exports in textiles, apparel, footwear, electronics, and green technology.”

The World Bank’s revised forecast reflects a strong confidence in India’s economic trajectory, driven by strategic policy measures and a focus on expanding trade and exports.

Revanth Reddy And Ajay Banga Agree On Roadmap For Collaborative Projects

August 8, 2024, 4:54 pm

During his visit to the United States, Telangana Chief Minister A Revanth Reddy and World Bank President Ajay Banga held discussions and agreed to create a roadmap for collaboration on various projects, according to a release from the Chief Minister’s Office (CMO) on Wednesday. The release noted that potential partnership areas being explored include skills development, urban renewal and innovation, Net Zero initiatives, healthcare for citizens, diagnostics, and electronic records, among other areas.

During the more than hour-long meeting between the World Bank President and the Chief Minister along with his team, it was agreed to form a cross-functional team to rapidly develop feasible projects in each key area. The discussions primarily focused on themes such as people, the planet, sustainability, health, skills, and job creation.

The support from the World Bank would significantly enhance several of Chief Minister Revanth Reddy’s key initiatives, such as the Musi River rejuvenation project, Skill University, Future City, Citizen Healthcare, and the Hyderabad 4.0 development, according to the Chief Minister’s Office (CMO). Top of Form

“The World Bank, while expressing delight and optimism about the balanced vision of the Chief Minister for Telangana and Hyderabad, highlighted how the bank has enjoyed success in generating positive outcomes in the region with several project initiatives earlier. He also showcased a great interest in backing the vision for the creation of a Net Zero city,” the CMO said in its release.

Reddy expressed his satisfaction with the prominent endorsement of several major state initiatives and committed to pursuing each project with a mission-focused approach to achieve ambitious results and outcomes, while maintaining the highest level of transparency.

This marks the first time Telangana has sought to collaborate with any Bretton Woods institutions. The Telangana delegation provided an overview of various developments affecting citizens’ lives, the environment, and sustainability within the state. The meeting was attended by IT & Industries Minister D Sridhar Babu, Telangana Chief Secretary A Shanta Kumari, and other officials including Jayesh Ranjan, Ramakrishna Rao, V. Sheshadri, Vishnu Vardhan Reddy, and Ajith Reddy. World Bank executive director Parameswaran (‘Param’) Iyer, who also participated in the discussions, commended the Telangana government for its comprehensive, balanced, and impactful vision, prioritising the state and its people, according to the CMO.

India Continues To Remain Top Recipient Of Remittances, Crosses $100 Billion Mark

June 26, 2024, 5:43 pm

In the field of Remittance, India continues to stay at the top, as in the fiscal year 2023-24, the indian diaspora has sent around $107 billion in remittances. Thus, crossing the $100 billion mark for the second financial year consecutively.

According to ET report, the net remittances are now double the amount of net foreign investments, which consists of both FDI and portfolio investments. Which now stands at $54 billion.

As implied by private transfers in balance of payments, the gross remittances stood at $119 billion in FY 2023-24. But, after taking income repatriation into account by private foreign natives and other remittances, the net private transfers stood at $107 billion.

According to RBI survey, the United States of America serve as a huge source of remittances, which stands at 23%.

After India, other countries like Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion) also get a huge remittance from their diasporas, as of 2023.

However as per World Bank, the remittance transferred to low-and-middle income countries will most likely decrease to 3.1% in 2024.

This modest prediction is driven by many factors primarily by slow economic growth and presence of weak job market in host countries.

World Bank: Waste management a significant challenge for India and World

October 31, 2023, 1:13 pm

One of the biggest sustainability challenges facing the world, not just India, is waste management. A recent Commodity Markets Outlook from the World Bank clarifies the urgent problem of waste generation and its extensive effects on the environment, the economy, and society. Cities throughout the world are facing an urgent sustainability challenge as the average amount of waste per person reached 376 kg in 2020, with India leading the way in addressing this problem.

In a world where Sustainable Development Goal (SDG) 11 aims to make cities and communities inclusive, safe, resilient, and sustainable, rising waste, especially in the form of plastics, is emerging as a critical concern. The report highlights the striking fact that in 2020, the average person generated approximately 376 kilograms of waste, which is approximately six times the weight of an average individual.
Waste management is not just a local concern; it has global ramifications. As indicated by SDG 3, waste is a substantial contributor to greenhouse gas emissions. It also leads to land degradation, and water pollution (SDG 15), and exacerbates the already concerning issues of landfills and incineration (SDG 14).
The report emphasizes the need for proper waste collection and management to avoid adverse health and environmental impacts.
The United Nations SDG 11 aims to make cities inclusive, safe, resilient, and sustainable. However, the rise in waste generation, especially plastics, poses a significant obstacle to achieving this goal.

G20 : According to the World Bank the impact of India’s digital public infrastructure goes beyond financial inclusion

September 8, 2023, 11:00 am

According to the World Bank, India’s digital public infrastructure has had a profound impact that goes well beyond financial inclusion. In a document, the international financial institution praised India, noting that the progress it has made in only six years would have taken roughly five decades otherwise.

India has created some of the best digital public goods infrastructure, which has the potential to transform lives all over the world. Examples include UPI, Jan Dhan, Aadhar, ONDC, and CoWin. The World Bank document created in advance of the significant G20 Summit in New Delhi emphasized the important steps taken by the Modi administration as well as the crucial role that government policy and regulation play in determining the landscape of digital public infrastructure (DPI).

World Bank said JAM (Jan Dhan, Aadhar, Mobile) trinity – a combination of bank accounts for all, Aadhaar, and mobile connectivity — has propelled financial inclusion rate from 25 per cent in 2008 to over 80 per cent of adults in past six years, a journey which according to it shortened by up to 47 years — thanks to DPIs.
“While DPIs’ role in this leapfrogging is undoubtable, other ecosystem variables and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification,” the World Bank document noted.

The number of PM Jan Dhan Yojana accounts has tripled since its launch in 2014, the first year of Narendra Modi’s tenure as prime minister; women own 56 percent of these accounts, totaling more than 260 million.

Food waste in Pakistan costs $4 billion annually, says report

May 2, 2023, 4:25 pm

As per the news report on Tuesday, a shocking report in Pakistan has revealed that food waste is worth USD 4 billion annually.

Pakistan wastes 26% of its food production, i.e., 19.6 million metric tonnes a year. Most food items are wasted because they do not meet the criteria of appearance, size, and colour, despite the steps taken to ensure food security, as per the report by Pakistan’s Ministry of National Food Security and Research.

According to media reports, the majority of food items are excluded from the supply chain and wasted for a variety of reasons.

The majority of food items stored in kitchens are wasted annually after their expiration date, as highlighted in the report. Despite being an agricultural country, Pakistan is facing a shortage of food items, particularly after recent floods and heavy rain. During a review meeting in Islamabad on the Kissan Package, which is designed to develop the agricultural sector, Prime Minister Shehbaz Sharif directed the government to expedite its implementation. He stressed the importance of ensuring food security in Pakistan and noted that the development of the agriculture sector is the key to achieving this goal, as per the media report.

World Bank grants USD 363 million to Karnataka to improve state’s drinking water supply

March 29, 2023, 1:23 pm

The Executive Board of Directors of the World Bank authorized a USD 363 million loan to Karnataka to supply two million rural households with clean drinking water through a piped water connection.
The loan will mature in 13.5 years, including a two-year grace term. According to the World Bank, almost 77 percent of Karnataka is arid or semi-arid and susceptible to climate change-related variable rainfall that can cause droughts and floods, deplete groundwater supplies, and worsen water quality.

India’s Health Sector to get aid of USD 1 billion loan from World Bank

March 5, 2023, 2:04 pm

The Government of India and the World Bank signed two complementary loans of USD 500 million each to support and enhance India’s health sector development.
According to a release by World Bank on March 3, this combined financing of USD 1 billion will support India’s flagship Pradhan Mantri-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), launched in October 2021, to improve the public healthcare infrastructure across the country. In addition to the national-level interventions, one of the loans will prioritize health service delivery in seven states including Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu, and Uttar Pradesh, the release said.
The agreement was signed by Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Auguste Tano Kouame, Country Director, India, World Bank.

“The COVID-19 pandemic brought to the fore the urgent need for pandemic preparedness and health system strengthening around the world and was a stark reminder that pandemic preparedness is a global public good,” said Auguste Tano Kouame.
“The two Projects are supporting India’s decision to increase the resilience and preparedness of the country’s health systems against future pandemics. This will be of great benefit for the populations of the states participating in the projects and will generate positive spillovers for other states,” Kouame added.
India’s performance in health has improved over time. According to World Bank estimates, India’s life expectancy–at 69.8 in 2020, up from 58 in 1990–is higher than the average for the country’s income level.

First Global Partnership for Financial Inclusion G20 summit to start in Kolkata

January 9, 2023, 12:47 pm

The first G20 Global Partnership for Financial Inclusion (GPFI) meeting under G20 India Presidency is scheduled to be held from 9th January to 11th January 2023 in Kolkata. The city has been decked up for the event. Tight security has been ensured for the delegates.

As per officials, principles of digital financial inclusion, remittance costs and SME finance availability will be the key focus of the summit. The meeting will open with a Symposium on “Unlocking the potentials of Digital Public Infrastructure for advancing financial inclusion and productivity gains”. This will also involve a “Digital innovations for Financial Inclusion” exhibition. A domestic outreach programme on digital financial literacy involving over 1,800 students from various schools is also part of the programme.

The inaugural session will be addressed by Queen Máxima of the Netherlands. GPFI member countries, guest countries and international organisations invited by India, will take part in the meeting. Twelve international speakers including senior officials from the World Bank, the Monetary Authority of Singapore, France and Estonia will attend this G20 meeting.

West Bengal Chief Minister Mamata Banerjee may also attend the meeting on Monday, a Union Finance Ministry official said. She is likely to promote West Bengal as an ideal destination for investments.

Indian economy to grow 6.9% in FY2023, says World Bank

December 6, 2022, 1:21 pm

According to a report released by the World Bank on Tuesday, India’s economy is ecpected to grow 6.9% in the current fiscal year as a result of tighter monetary policy and rising commodity prices.

Asia fourth-largest economy expanded 6.3% in the July-September quarter, and gross domestic product growth for the full fiscal year is likely to be 6.8-7%, the government said last week.

The World Bank increased its 6.5% previous growth prediction for India to 6.9% for the current fiscal year. From 7% before, the Bank reduced its forecast for the upcoming fiscal year to 6.6%.

The rise in commodity prices and the tightening of monetary policy by central banks throughout the world have affected India, like its counterparts globally.

In contrast to other emerging economies, the World Bank is convinced that India would be far less affected by the global recession.

According to the research, retail inflation will average 7.1% this year, but it also cautions that the decline in commodity prices may lessen inflationary pressures.

India’s annual retail inflation rate dropped to 6.77% in October, a three-month low, but some experts think it could still be two years before it reaches 4%, the middle of the Reserve Bank of India’s goal range.

India to receive over record USD 100 billion in remittances in 2022: World Bank

December 1, 2022, 1:15 pm

As India retains the top spot as the world’s top recipient of remittances migrant workers from India are set to send home a record USD 100 billion in 2022, despite global headwinds like rising prices.

The latest Migration and Development Brief, World Bank states that remittance flows to India will rise 12 per cent, putting its inflows ahead of China, Mexico and the Philippines. “Growth in remittance flows is estimated at 9.3 per cent for Latin America and the Caribbean, 3.5 per cent in South Asia, 2.5 per cent in the Middle East and North Africa, and 0.7 per cent in East Asia and the Pacific. In 2022, for the first time a single country, India, is on track to receive more than USD 100 billion in yearly remittances,” the World Bank said in a statement.

According to World Bank, the easing of flows reflects the discontinuation of special incentives some governments had introduced to attract flows during the pandemic, as well as preferences for informal channels offering better exchange rates.
Remittances to India were enhanced by wage hikes and a strong labour market in the United States and other Organisation for Economic Co-operation and Development (OECD) countries, it adds.

Not just in India, remittances to South Asia grew an estimated 3.5 per cent to USD 163 billion in 2022. However, there is a large disparity across countries, from India’s projected 12 per cent gain to Nepal’s 4 per cent increase, to an aggregate decline of 10 per cent for the region’s remaining countries.