IMF Cuts Pakistan’s GDP Forecast for FY23 to 0.5%

The International Monetary Fund (IMF) has revised downward the GDP growth rate projection for Pakistan from 2 percent to 0.5 percent for the current fiscal year (FY23).

The Fund in its latest report, “World Economic Outlook (WEO): A rocky recovery” released on Tuesday noted that Pakistan’s GDP is projected to be 3.5 percent in FY24 which stood at 6 percent in FY22.

The Fund has revised upward the inflation rate projection, as annual averages, to 27.1 percent for the current fiscal year against its earlier projection of 19.9 percent. According to the report, consumer prices were 12.1 percent in FY22 and are projected to be 21.9 percent in FY24.

Unemployment in the country is projected to increase to seven percent in 2023 against 6.2 percent in 2022, which is projected to be 6.8 percent in 2024.

The current account balance, as a percent of GDP, is projected at negative 2.3 percent in FY23 compared to negative 4.6 percent in FY22 and is projected at negative 2.4 percent for FY24.

The Fund in another report, “Global Financial Stability Report: Safeguarding Financial Stability Amid High Inflation And Geopolitical Risks” released today stated that exchange rates in several frontier markets (Egypt, Ghana, Pakistan) have weakened substantially through market pressure or official devaluations, with a growing divergence between official and parallel market rates in some cases.