ISLAMABAD: The International Monetary Fund (IMF) has projected GDP growth rate for Pakistan at 2.5 per cent for 2024 against negative 0.5 percent in 2023.
The World Bank projected GDP growth rate for Pakistan at 1.7 per cent for 2023-24 while the Asian Development Bank (ADB) has projected it at 1.9 percent.
The fund in its latest report, ‘World Economic Outlook 2023, Navigating Global Divergences’, has projected inflation rate at 23.6 percent for 2024 against 29.2 percent in 2023. However, the report has projected consumer prices for the end of period of 2024 at 17.5 percent against 29.4 percent in 2023.
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The current account balance is projected at negative 1.8 per cent for 2024 compared to negative 0.7 per cent for 2023.
The Fund has projected a decrease in unemployment in Pakistan to 8 per cent in 2024 compared to 8.5 per cent in 2023. The Fund has projected Pakistan’s general government net lending/ borrowing at negative 7.6 per cent for 2024 against negative 8.1 per cent for 2023.
The Fund stated that Brazil’s recent decision to adopt a continuous (rather than calendar year) 3 per cent inflation rate target from 2025 onward is a concrete example of an improvement in operational effectiveness and communications strategy, helping to reduce uncertainty and enhance monetary policy effectiveness. Additional examples of improvements in communications strategies include actions since 2020 by the central banks of Pakistan and Uruguay to announce their preset monetary policy meeting calendar in advance.
The Fund has stated that global growth is forecast to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2.9 per cent in 2024.
The projections remain below the historical (2000–19) average of 3.8 per cent, and the forecast for 2024 is down by 0.1 percentage point from the July 2023 Update to the World Economic Outlook.
For advanced economies, the expected slowdown is from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024, amid stronger-than-expected US momentum but weaker-than-expected growth in the euro area. Emerging market and developing economies are projected to have growth modestly decline, from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024, with a downward revision of 0.1 percentage point in 2024, reflecting the property sector crisis in China. Forecasts for global growth over the medium term, at 3.1 per cent, are at their lowest in decades, and prospects for countries to catch up to higher living standards are weak. Global inflation is forecast to decline steadily, from 8.7 per cent in 2022 to 6.9 per cent in 2023 and 5.8 per cent in 2024. But the forecasts for 2023 and 2024 are revised up by 0.1 percentage point and 0.6 percentage point, respectively, and inflation is not expected to return to target until 2025 in most cases. The global recovery from the COVID-19 pandemic and Russia’s invasion of Ukraine remains slow and uneven. Despite economic resilience earlier this year, with a reopening rebound and progress in reducing inflation from last year’s peaks, it is too soon to take comfort. Economic activity still falls short of its pre-pandemic path, especially in emerging market and developing economies, and there are widening divergences among regions. Several forces are holding back the recovery. Some reflect the long-term consequences of the pandemic, the war in Ukraine, and increasing geo-economic fragmentation. Others are more cyclical in nature, including the effects of monetary policy tightening necessary to reduce inflation, withdrawal of fiscal support amid high debt, and extreme weather events.
Copyright Business Recorder, 2023
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