ISLAMABAD: The International Monetary Fund (IMF) Tuesday said that Pakistan’s economymight grow by 4% in the current fiscal year but projected the current account deficit at 3.1% of the gross domestic product (GDP) or over $10 billion, a figure that is far higher than the official estimates.
The global lender has given three-year estimates of major economic indicators of Pakistan in the World Economic Outlook (WEO) report that it released on the eve of the annual IMF-World Bank Group meetings.
The projections carry mixed news for Pakistan. Unlike its sister organisation the World Bank, the IMF has given a better economic growth projection for this fiscal year and endorsed the last fiscal year’s economic growth estimates of 3.9%.
Pakistan’s economy, which saw a 3.9% growth in the last fiscal, is projected to grow by 4% in 2021-22, the WEO report showed. However, the 4% growth rate was less than the official target of 4.8% yet it is higher than the projections made by the World Bank.
Pakistan on Friday termed the World Bank’s estimate of 3.5% economic growth in the previous fiscal year “unrealistic” and also stated that the Washington-based lender underestimated the current fiscal year’s economic growth rate at 3.4%.
The WEO report stated that the average inflation rate in Pakistan could be 8.5% this fiscal year. And on an annualised basis, the IMF has projected inflation in Pakistan at 9.2% this fiscal year.
Inflation remained the biggest concern for the incumbent government and any further increase in the administrative prices under the IMF conditions may stoke inflation rate to double digits.
The IMF report came a day before Finance Minister Shaukat Tarin is scheduled to meet the fund’s management in Washington. Sources said that Tarin will seek concessions against harsh conditions put forth by the IMF staff, during October 4-8 talks for the revival of the stalled programme.
Tarin is also scheduled to meet IMF Managing Director Christalina Georgieva on Friday, the sources added.