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
Islamabad says surge in aircraft orders after India standoff could end IMF reliance
- Pakistani jets came into the limelight after Islamabad claimed to have shot down six Indian aircraft during a standoff in May last year
- Many countries have since stepped up engagement with Pakistan, while others have proposed learning from PAF’s multi-domain capabilities
ISLAMABAD: Defense Minister Khawaja Asif on Tuesday said Pakistan has witnessed a surge in aircraft orders after a four-day military standoff with India last year and, if materialized, they could end the country’s reliance on the International Monetary Fund (IMF).
The statement came hours after a high-level Bangladeshi defense delegation met Pakistan’s Air Chief Marshal Zaheer Ahmed Baber Sidhu to discuss a potential sale of JF-17 Thunder aircraft, a multi-role fighter jointly developed by China and Pakistan that has become the backbone of the Pakistan Air Force (PAF) over the past decade.
Fighter jets used by Pakistan came into the limelight after Islamabad claimed to have shot down six Indian aircraft, including French-made Rafale jets, during the military conflict with India in May last year. India acknowledged losses in the aerial combat but did not specify a number.
Many countries have since stepped up defense engagement with Pakistan, while delegations from multiple other nations have proposed learning from Pakistan Air Force’s multi-domain air warfare capabilities that successfully advanced Chinese military technology performs against Western hardware.
“Right now, the number of orders we are receiving after reaching this point is significant because our aircraft have been tested,” Defense Minister Asif told a Pakistan’s Geo News channel.
“We are receiving those orders, and it is possible that after six months we may not even need the IMF.”
Pakistan markets the Chinese co-developed JF-17 as a lower-cost multi-role fighter and has positioned itself as a supplier able to offer aircraft, training and maintenance outside Western supply chains.
“I am saying this to you with full confidence,” Asif continued. “If, after six months, all these orders materialize, we will not need the IMF.”
Pakistan has repeatedly turned to the IMF for financial assistance to stabilize its economy. These loans come with strict conditions including fiscal reforms, subsidy cuts and measures to increase revenue that Pakistan must implement to secure disbursements.
In Sept. 2024, the IMF approved a $7 billion bailout for Pakistan under its Extended Fund Facility (EFF) program and a separate $1.4 billion loan under its climate resilience fund in May 2025, aimed at strengthening the country’s economic and climate resilience.
Pakistan has long been striving to expand defense exports by leveraging its decades of counter-insurgency experience and a domestic industry that produces aircraft, armored vehicles, munitions and other equipment.
The South Asian country reached a deal worth over $4 billion to sell military equipment to the Libyan National Army, Reuters report last month, citing Pakistani officials. The deal, one of Pakistan’s largest-ever weapons sales, included the sale of 16 JF-17 fighter jets and 12 Super Mushak trainer aircraft for basic pilot training.
