IMF lowers Pakistan’s GDP growth rate to 0.5% for FY23

As the economic situation remains gloomy, the International Monetary Fund (IMF) slashed Pakistan’s real GDP growth rate projection from 2% to 0.5% for the current fiscal year, reported 24NewsHD TV channel Tuesday.

In the latest World Economic Outlook (WEO) report released on Tuesday, the IMF forecast that the country’s GDP growth rate would be 3.5% in fiscal year 2024. In its last report issued in January, the lender had downgraded the growth projection to 2% from 3.5%.

The IMF report forecast that inflation, measured by the Consumer Price Index (CPI), would be recorded around 27.1% in FY23 and fall to 21.9% in FY24.

Meanwhile, the current account deficit (CAD) was forecast to clock in at 2.3% and 2.4% in FY23 and FY24, respectively.

The IMF’s downgrading comes days after the World Bank and Asian Development Bank lowered Pakistan’s growth rate projections to 0.4% and 0.6%, respectively.

The country’s economy has been struggling to recover, with inflation at a decades-high level and several companies shutting down or reducing operations citing the economic situation. The delay in the release of an economic bailout by the IMF is adding to the uncertain situation.

This year, debt to GDP ration is likely to be 73.6 percent, according to the IMF, while next year, Pakistan's debt-to-GDP ratio is expected to reach 68.9 percent.

This year, Pakistan's GDP will be 85.4 trillion, according to the IMF.

The IMF expects Pakistan's GDP to reach 108.4 next year.

According to the IMF, this year, the unemployment rate in Pakistan will remain up to 7%.

The unemployment rate in Pakistan could be 6.8 percent next year, according to the IMF.

The international lender lowered its outlook for the global economy as well, while predicting that most countries would avoid a recession this year despite economic and geopolitical concerns.

The IMF predicted the global economy would grow by 2.8% this year and 3% in 2024, a decline of 0.1% from its previous forecasts in January.

"The global economy is recovering from the shocks of the last few years, and particularly of course the pandemic, but also the Russian invasion of Ukraine," IMF chief economist Pierre-Olivier Gourinchas said in a press briefing ahead of the report's release.