ISLAMABAD    -     After the World Bank and Asian De­velopment Bank (ADB), the Inter­national Monetary Fund (IMF) has also projected lower GDP growth for Pakistan only at 0.5 percent for the current fiscal year.

The IMF in its latest report, “World Economic Outlook (WEO): A rocky recovery” has projected that Paki­stan’s growth rate would decline, inflation and unemployment rates would increase and current account deficit would narrow in the ongoing financial year. The Fund has estimat­ed that Pakistan’s growth would de­cline to 0.5 percent in FY23 from 6 percent in the last fiscal year FY22. However, the growth would increase to 3.5 percent in the upcoming fiscal year FY24. The IMF has estimated that Pakistan’s inflation rate would increase to 27.1 percent in the cur­rent fiscal year from 12.1 percent of the previous year. Meanwhile, the in­flation would reduce to 21.9 percent in the next fiscal year FY24. Simi­larly, the unemployment rate would also enhance in the current fiscal year to seven percent from 6.2 per­cent of the previous year. The infla­tion rate would slightly reducd to 6.8 percent in next year 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. Earlier, the ADB had noted that Pakistan’s economic growth is expected to slow significantly in the current fiscal year in the wake of last year’s devastating floods, balloon­ing inflation, a current account defi­cit, and an ongoing foreign exchange crisis. “Growth is projected to de­celerate to 0.6 percent in FY2023,” said Asian Development Outlook (ADO) April 2023, ADB’s flagship economic report. Meanwhile, ac­cording to the World Bank’s latest Pakistan Development Update: Re­cent Economic Developments, Out­look, and Risks, Pakistan’s econo­my is expected to grow by only 0.4 percent in the current fiscal year ending June 2023. According to the IMF report, the baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, be­fore settling at 3.0 percent in 2024. Advanced economies are expect­ed to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. In a plausible alternative scenario with further financial sector stress, glob­al growth declines to about 2.5 per­cent in 2023 with advanced econo­my growth falling below 1 percent. Global headline inflation in the baseline is set to fall from 8.7 per­cent in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core) infla­tion is likely to decline more slowly. Inflation’s return to target is unlike­ly before 2025 in most cases.