The International Monetary Fund (IMF) has forecast a growth rate of 4% for Pakistan as well as the highest rate of inflation and unemployment for the current financial year.
According to the Dawn newspaper, the growth rate is exactly the same as what the Asian Development Bank (ADB) said about two weeks ago.
In addition, a few days ago, the World Bank had forecast a growth rate of 3.4%, which was rejected by the government as unrealistic.
Fitch Solutions had projected Pakistan’s growth rate at 4.2 percent, significantly below the budget target of 4.8 percent.
The State Bank of Pakistan had said that the GDP growth rate is expected to be more than 5.4%.
In its World Economic Outlook (WEO), the Washington-based lending agency has forecast an average inflation rate of 8.5 percent, a current account deficit of 3.1 percent of GDP, and an unemployment rate of 4.8 percent this fiscal year.
The IMF had projected that the economic growth rate would gradually reach 5% of GDP by the fiscal year 2026, which was estimated in April this year.
He said that the inflation rate would come down to 8.5 percent this year as compared to 8.9 percent in the previous financial year but would rise again to 9.2 percent by the end of next year.
The IMF expected the Consumer Price Index to gradually decline to 6.5% by FY2026.
He estimated that the current account deficit would increase from 0.6 percent of GDP in FY 2021 to 3.1 percent next year (FY 2022) and then to 2.8 percent by FY 2026.
The WEO has forecast a global growth rate of 5.9% in 2021 and 4.9% in 2022.
“As the global economic recovery continues, the fault lines caused by Code 19 appear to be more durable, and are expected to leave a lasting impression on medium-term performance in the near term,” the WEO noted.
However, IMF chief economist Geeta Gopinath said the risks to economic prospects had increased and the trade-in policies had become more complex.
“Compared to our July forecast, global growth estimates for 2021 have fallen marginally to 5.9 percent and have not changed to 4.9 percent for 2022,” he said.
“The outlook for the low-income developing group has become very bleak due to the epidemic,” he said.
He hoped that the GDP growth of the developed economic group would regain the pre-epidemic trend in 2022.
Emerging market and emerging economy group (excluding China) production is expected to be 5.5% lower than the pre-epidemic forecast in 2024, which will be a major blow to their improvement in living standards.
These differences are the result of a wide gap between ‘vaccine distribution’ and policy support.
Although more than 60 percent of the population in developed economies has been fully vaccinated and some are now receiving booster shots, about 96 percent of the population in low-income countries has not been vaccinated.
The IMF also advised member states to address post-epidemic economic challenges, including raising human capital, facilitating new opportunities for development in green technology and digitization, reducing inequality, and so on.