The International Monetary Fund (IMF) in its recent World Economic Outlook update on Monday has forecasted a slower growth rate for Pakistan, subsiding to a shocking 2.6 percent for the year 2017.
While the Asian Development Bank revealed the growth rate for Pakistan to be a better-than-expected 5.28 percent for 2016-17 and 5.5 percent for 2017-18, the IMF thinks exactly the opposite.
The reason behind the slow growth rates is the declining oil prices, considering that fact that Saudi Arabian and other Gulf economies are having a tough time. Countries in the Middle East and North Africa, along with Afghanistan and Pakistan are all expected to witness a lower growth rate this year.
The IMF has attributed last year’s strong regional economic outlook to Iran’s strong 6.5 percent economic growth. However, Saudi Arabia’s growth is expected be to 0.1 percent showing a decline of 0.3 percent from April’s projections. It is the lowest growth for Saudi Arabia since 2009, whereby its growth receded to a shocking 2 percent.
The IMF however, feels confident that the regional growth will bounce back to 3.3 percent in 2018 and 1.1 percent for Saudi Arabia.
The IMF has said in its report that:
“The recent decline in oil prices, if sustained, could weigh further on the outlook for the region´s oil exporters”.
Saudi Arabia and the Gulf Countries rely heavily on the oil prices for their economy and the oil prices influence the regional economic growth a great deal. Loss of billions of dollars since 2015 has led to increased fuel prices, which has been a precursor for reduced growth rates.