IMF drastically cuts Pakistan’s FY23 growth forecast to 0.5pc

ISLAMABAD: The International Monetary Fund (IMF) has revised downward the GDP growth rate projection for Pakistan from two percent to 0.5 percent for the current fiscal year, ie, 2023. The Fund projected a rise in inflation from 19.9 percent to 27.1 and unemployment from 6.2 percent to 7 percent.

The World Bank has already revised downward the GDP growth projection to 0.4 per cent and Asian Development Bank (ADB) to 0.6 per cent for the current fiscal year 2023.

The Fund in its latest report, “World Economic Outlook (WEO): A rocky recovery” released on Tuesday noted that Pakistan’s GDP is projected to be 3.5 per cent in the fiscal year 2024 which was six percent in the fiscal year 2022.

World Bank cuts Pakistan’s GDP forecast to 0.4%

The Fund has also revised upward the inflation rate projection to 27.1 percent for the current fiscal year against its earlier projection of 19.9 per cent. According to the report, consumer prices were 12.1 per cent in 2022 and are projected to be 21.9 per cent in 2024.

Unemployment in the country is projected to increase to seven percent in 2023 against 6.2 per cent in 2022, which is projected to be 6.8 per cent in 2024.

The current account balance is projected at negative 2.3 per cent for 2023 compared to negative 4.6 per cent in 2022 and projected negative 2.4 per cent for 2024.

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The Fund in another report, “Global Financial Stability Report: Safeguarding Financial Stability Amid High Inflation And Geopolitical Risks” released on Tuesday stated that exchange rates in several frontier markets (Egypt, Ghana, Pakistan) have weakened substantially through market pressure or official devaluations, with a growing divergence between official and parallel market rates in some cases.

Copyright Business Recorder, 2023