The International Monetary Fund (IMF) expects Pakistan to have a modest economic growth rate of 2.5 percent in the financial year (FY) in 2023-24, lower than the federal government’s FY24 projections of 3.5 percent.
As per the lender’s assessment report on the South Asian nation’s economic performance, it sees inflation decreasing to 25.9 percent by the end of FY24. Although still very high, the unemployment rate of 8.5 percent will drop slightly to 8 percent.
The IMF report sees the current debt-to-GDP ratio of 81.8 percent fall to 74.9 percent by 2020.
The fiscal deficit is projected to decrease slightly to 7.5 percent of GDP, while the primary surplus is tipped to clock in at 0.4 percent of GDP.
These projections come after the IMF Executive Board on Wednesday approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of SDR2,250 million (about $3 billion, or 111 percent of quota) to support the authorities’ economic stabilization program.
The arrangement comes at a challenging economic juncture for Pakistan. A difficult external environment, devastating floods, and policy missteps have led to large fiscal and external deficits, rising inflation, and eroded reserve buffers in FY23, the IMF said in its statement.
The new SBA-supported program will provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from multilateral and bilateral partners.
The Executive Board’s approval essentially allows for an immediate disbursement of SDR894 million (or about $1.2 billion). The remaining amount will be phased over the program’s duration, subject to two quarterly reviews.
Source: Pro Pakistani
