ISLAMABAD: The International Monetary Fund (IMF) has projected a GDP growth rate of 1.5 percent for Pakistan for the current fiscal year 2020-21, compared to the negative 0.4 percent projection for the previous fiscal year 2019-20, in the Economic Outlook for 2021 released this week.
On the other hand, the Pakistan government has projected a GDP growth rate target of 2.1 percent for the current fiscal 2020-2, expecting economic growth and an upwards trajectory as the COVID-19 pandemic winds down.
Before the advent of the coronavirus, the IMF had projected a GDP growth rate of positive 1.9 percent for Pakistan in the last fiscal year.
The IMF’s World Economic Outlook for 2021 shows the global economy is projected to grow at 5.5 percent, emerging economies at 8.3 percent and Africa at 3.2 percent. India is projected to grow at 11.5 percent, China 8.1 percent, Malaysia 7 percent, Turkey 6 percent, France 5.5 percent, USA 5.1 percent, Mexico 4.3 percent and Nigeria 1.5 percent.
Earlier this month, Pakistan’s central bank kept interest rates steady at 7%, indicating that it would keep them on hold in the near future as it seeks to balance economic headwinds from the COVID-19 pandemic with the need to curb inflation.
“The (Monetary Policy Committee) felt that the existing accommodative stance of monetary policy remained appropriate to support the nascent recovery while keeping inflation expectations well-anchored,” the State Bank of Pakistan said in a statement.
It is the third time that Pakistan has kept its main policy rate unchanged after cutting it by 625 basis points, down from 13.25%, at the time the global pandemic hit its economy last February.
The bank also provided guidance that it planned to keep interest rates unchanged “in the near term” in the absence of “unforeseen developments”, adding that any changes to interest rates as the economy recovered would have to be “measured and gradual”.
The result, which was largely in line with analysts’ expectations, was in part due to some domestic economic improvement with the bank saying there were upside risks to the projected 2% growth projected for the 2021 financial year, which ends in June.
The bank has also had to balance the need to provide stimulus throughout the coronavirus pandemic with tempering inflation.
Price hikes have hit consumers hard over the past year though inflation has eased since hitting a 5-year high of more than 9% late last year, with the country posting 8% consumer price inflation in December.
IMF projects Pakistan growth rate at 1.5% for current fiscal, up from last year
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IMF projects Pakistan growth rate at 1.5% for current fiscal, up from last year
- The Fund projected negative 0.4 percent for the previous fiscal year 2019-20
- Government set GDP growth target of 2.1 percent for current fiscal hoping for improvement after COVID-19 pandemic
Pakistan FM discusses regional situation with Saudi counterpart, urges restraint and dialogue
- This is the second time the two foreign ministers have spoken since the Arab Coalition targeted weapon shipments on Yemen’s Mukalla port
- Saudi Arabia’s foreign ministry has invited factions in south Yemen to hold a dialogue in Riyadh to ‘discuss just solutions to southern cause’
ISLAMABAD: Pakistan’s foreign minister, Ishaq Dar, discussed the regional situation with his Saudi counterpart, Prince Faisal bin Farhan, and called for restraint and dialogue to resolve issues, the Pakistani foreign office said late Friday, amid tensions prevailing over Yemen.
This is the second time the two foreign ministers have spoken this week since the Saudi Arabia-led Coalition to Support Legitimacy in Yemen carried out a “limited” airstrike on Dec. 30, targeting two shipments of smuggled weapons and military equipment sent from the Emirati port of Fujairah to Mukalla in southern Yemen.
A coalition forces spokesperson said the weapons were meant to support the Southern Transitional Council (STC) forces, backed by the United Arab Emirates (UAE), in Yemen’s Hadramaut and Al-Mahra “with the aim of fueling the conflict.” The UAE has since announced withdrawal of its remaining troops from Yemen, rejecting any actions that could threaten the Kingdom or undermine regional stability.
In their telephonic conversation late Friday, the Pakistani and Saudi foreign ministers discussed the latest situation in the region, according to the Pakistani foreign office.
“FM [Dar] stressed that all concerned in the region must avoid any escalatory move and advised to resolve the issues through dialogue and diplomacy for the sake of regional peace and stability,” it added.
Separately, Saudi Arabia’s foreign ministry invited factions in south Yemen to hold a dialogue in Riyadh to “discuss just solutions to the southern cause.”
The ministry statement said the conference in the Saudi capital had been requested by Rashad Al-Alimi, President of the Yemeni Presidential Leadership Council, and the Kingdom urged all factions to participate “to develop a comprehensive vision” that would fulfill the aspirations of the southern people.
Disregarding previous agreements with the Arab Coalition, the STC separatist group launched a sweeping military campaign early in December, seizing the governorates of Hadramaut along the Saudi border and the eastern governorate of Al-Mahra in Yemen’s border with Oman. It also took control of the strategic PetroMasila oilfields, which account for a massive portion of Yemen’s remaining oil wealth.
The advance has raised the spectre of the return of South Yemen, a separate state from 1967 to 1990, while dealing a hammer-blow to slow-moving peace negotiations with Iran-backed Houthi rebels.
Saudi Arabia said the STC action poses a direct threat to the Kingdom’s national security, and regional stability. The Kingdom has reiterated the only way to bring the southern cause to a resolution is through dialogue.
On Thursday, Pakistan’s foreign office expressed solidarity with Saudi Arabia and reaffirmed Islamabad’s commitment to the Kingdom’s security, amid rising tensions in Yemen.
“Pakistan expresses complete solidarity with the Kingdom of Saudi Arabia and reaffirms its commitment to security of the Kingdom,” Pakistani foreign office spokesperson Tahir Andrabi told reporters at a weekly news briefing.
“Pakistan maintains its firm support for the resolution of Yemen issue through dialogue and diplomacy and hopes that Yemen’s people and regional powers work together toward inclusive and enduring settlement of the issue, safeguarding regional stability.”
Pakistan and Saudi Arabia signed a landmark defense pact in September last year, according to which aggression against one country will be treated as an attack against both. The pact signaled a push by both governments to formalize long-standing military ties into a binding security commitment.
