The International Monetary Fund (IMF) has projected that Pakistan’s economic growth will reach 2.5% in the current fiscal year, attributing this projection to global factors like high inflation and a slow recovery.
IMF report says Pakistan has faced significant economic challenges in recent years, exacerbated by the COVID-19 pandemic and monsoon floods that caused over $30 billion in losses. The country has also experienced a decline in foreign currency reserves and a depreciation of its national currency.
To prevent a sovereign debt default, Pakistan secured a crucial nine-month, $3 billion agreement with the IMF in July, although this deal led to increased inflation due to the required economic reforms.
The IMF emphasized the importance of monetary policy actions to anchor inflation expectations.
According to the report, Pakistan is expected to achieve substantial economic growth, going from -0.5% to 2.5% this fiscal year, with projections increasing to 5% by 2028.
The IMF also anticipates an unemployment rate of 8.5% this year, decreasing to 8 percent by 2024. Inflation is projected to reach 29.4 percent in 2023 but is expected to ease to 17.5 percent the following year.
The IMF’s report highlighted the slow and uneven global recovery from the COVID-19 pandemic and the impact of Russia’s invasion of Ukraine, cautioning that despite some earlier economic resilience, it’s too soon to feel entirely at ease.
Via: Arab News