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
https://arab.news/6b7ne
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
IMF hails Pakistan privatization drive, calls PIA sale a ‘milestone’
- Fund backs sale of national airline as key step in divesting loss-making state firms
- IMF has long urged Islamabad to reduce fiscal burden posed by state-owned entities
KARACHI: The International Monetary Fund (IMF) on Saturday welcomed Pakistan’s privatization efforts, describing the sale of the country’s national airline to a private consortium last month as a milestone that could help advance the divestment of loss-making state-owned enterprises (SOEs).
The comments follow the government’s sale of a 75 percent stake in Pakistan International Airlines (PIA) to a consortium led by the Arif Habib Group for Rs 135 billion ($486 million) after several rounds of bidding in a competitive process, marking Islamabad’s second attempt to privatize the carrier after a failed effort a year earlier.
Between the two privatization attempts, PIA resumed flight operations to several international destinations after aviation authorities in the European Union and Britain lifted restrictions nearly five years after the airline was grounded following a deadly Airbus A320 crash in Karachi in 2020 that killed 97 people.
“We welcome the authorities’ privatization efforts and the completion of the PIA privatization process, which was a commitment under the EFF,” Mahir Binici, the IMF’s resident representative in Pakistan, said in response to an Arab News query, referring to the $7 billion Extended Fund Facility.
“This privatization represents a milestone within the authorities’ reform agenda, aimed at decreasing governmental involvement in commercial sectors and attracting investments to promote economic growth in Pakistan,” he added.
The IMF has long urged Islamabad to reduce the fiscal burden posed by loss-making state firms, which have weighed public finances for years and required repeated government bailouts. Beyond PIA, the government has signaled plans to restructure or sell stakes in additional SOEs as part of broader reforms under the IMF program.
Privatization also remains politically sensitive in Pakistan, with critics warning of job losses and concerns over national assets, while supporters argue private sector management could improve efficiency and service delivery in chronically underperforming entities.
Pakistan’s Cabinet Committee on State-Owned Enterprises said on Friday that SOEs recorded a net loss of Rs 122.9 billion ($442 million) in the 2024–25 fiscal year, compared with a net loss of Rs 30.6 billion ($110 million) in the previous year.
