ISLAMABAD: Pakistan’s economic woes are expected to continue in the ongoing year, making the International Monetary Fund (IMF) revise the country’s growth forecast to 0.5 percent along with high inflation and unemployment rates.
The international lending agency made the forecast in its latest World Economic Outlook report at a time when the Pakistani government is striving to secure external financing to shore up its dwindling foreign exchange reserves.
The country was forced to limit its imports in recent months due to a massive dollar liquidity crunch amid its negotiations with the IMF for about a $1 billion tranche under a $7 billion loan program.
Despite protracted negotiations, the two sides failed to reach a staff-level agreement over the issue that has remained pending since last September.
The IMF shared Pakistan’s economic outlook in tabulated form, along with its other member states, showing a projected growth rate of 0.5 percent in 2023 along with 27.1 percent inflation and seven percent unemployment for the same period.
“Tentative signs in early 2023 that the world economy could achieve a soft landing — with inflation coming down and growth steady — have receded amid stubbornly high inflation and recent financial sector turmoil,” the report said at the outset while presenting the overall global economic outlook.
It added that debt levels remained high in much of the world, “limiting the ability of fiscal policymakers to respond to new challenges.”
Last October, the IMF estimated that Pakistan’s economic growth would be 3.5 percent for the current fiscal year, though it has now downgraded its own estimate in the new report.
Pakistan’s gross domestic product (GDP) stood at six percent in 2022, and the IMF expects it to grow once again in 2024 to 3.5 percent.
As the country’s economic crisis lingers on, its finance minister Ishaq Dar decided to cancel its trip to the United States last week to attend the spring meetings of the IMF and World Bank.
However, he announced he would attend important bilateral and multilateral meetings virtually and send a Pakistani delegation to Washington as well.
