ISLAMABAD (APP) - The International Monetary Fund (IMF) Thursday projected Pakistans Gross Domestic Product (GDP) growth at 3.5 percent in financial year 2009-10, saying that the inflation would come down to single digit. The IMF report on Regional Economic Outlook: Middle East and Central Asia, released on Thursday, said that the inflation would come down to 11.9 percent during 2008-09 and further slide to single digit at 7.5 percent in Fiscal year 2009-2010. The report projected GDP growth at 2.5 percent during 2008-09 which was about 6 percent in 2007-08. Speaking at the launching ceremony of the report here, IMF Resident Representative Pakistan, Middle East and Central Asia Department, Paul Rose observed that the budget deficit during 2009-10 would remain 4.6 percent. He said that Pakistans Large Scale Manufacturing sector had to face shortfall in exports due to decreasing demand owing to global recession. He was of the view that if the global recession continues Pakistan economy would be exposed to some risks including further decline in exports and private capital flows and decline in workers remittances. He said that consolidating macroeconomic stability and ensuring protection of vulnerable groups should be policy priorities of the government adding that it needs to take care of the deprived sections of the society. He said that the vulnerable groups could be protected through strengthening the social safety net by improved targeting of the poor under the Benazir Income Support Programme. He maintained that the unemployment rate is likely to increase in Pakistan, as the direct investment in the country and foreign remittances have gone down. He said that the third installment of IMF loan will be issued to Pakistan in July this year. Briefing about the world economic outlook, he said that financial markets would remain highly stressed where as the world economy will contract in 2009 by around 1.25 percent before recovering gradually in 2010. He said that emerging economies face dramatic drops in capital inflows, demand for their exports and commodity prices adding that a third wave of the global financial crisis is hitting the worlds poorest and most vulnerable countries. The IMF representative said that turning around global growth depends critically on concerted policy actions to stabilize financial conditions, as well sustained strong policy support to bolster demand.