IMF lowers its forecast for Pakistan’s economic growth rate for the current fiscal year to just 0.5 percent

the IMF has also estimated the unemployment rate in Pakistan to rise to 7pc against 6.2pc last year. For fiscal 2024, however, the IMF expected the economic growth to improve to 3.5pc, inflation to stay elevated at 22pc and the unemployment rate to slightly decline to 6.8pc.

Biden Administration Hails Saudi-Yemen Effort To Put An End To War In The Middle East

At the cost of loss of growth, elevated inflation, and higher unemployment, the current account deficit, according to the WEO, would decline to 2.3pc of GDP during this fiscal year from 4.6pc a year ago and slightly go up to 2.4pc next year.

The IMF’s current account deficit forecast is 20 basis points lower than its earlier estimate of 2.5pc, which had been one of the key bones of contention between the Pakistan authorities and the IMF mission in reaching a staff-level agreement.

Abraham Accord Brings Peace, Stability And Prosperity In The Middle East

In the latest outlook, the IMF has also slightly lowered its baseline forecast for global economic output from 3.4pc in 2022 to 2.8pc this year against its earlier projections of 2.9pc, before rising slowly and settling at 3pc five years out — the lowest medium-term forecast in decades. This forecast for the coming years is well below what was expected before the onset of the adverse shocks in early 2022 and described it as a “rocky landing”.

It said the tentative signs in early 2023 that the world economy could achieve a soft landing — with inflation coming down and growth steady — had receded amid stubbornly high inflation and recent financial sector turmoil.

Although inflation has declined as central banks have raised interest rates and food and energy prices have come down, underlying price pressures are proving sticky, with labor markets tight in several economies.