Image: Jhimpir Wind Farm Credit: Muzaffar Bukhari from Islamabad[CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)]
Pakistan’s economic growth will slow down to 2.9 percent of GDP this year, a slump from 5.2% last year as the country faces some tough challenges.
The International Monetary Fund’s forecast of a slowdown in economic development and spiral in unemployment follows similar predictions by World Bank and Asian Development Bank.
At the start of the annual IMF-World Bank Spring meetings, the IMF said it sees a 2.8 percent growth for Pakistan next year.
“In Pakistan, in the absence of further adjustment policies, growth is projected to remain subdued at about 2.5 percent, with continued external and fiscal imbalances weighing on confidence,” the global lending institution.
Pakistan’s economic woes include energy shortage, lack of infrastructure, fiscal deficit, widening trade gap. Pakistan’s finance minister Asad Umar is representing the country at the Spring meetings and is likely to reach an understanding on an IMF bailout package.
Before the meetings, Pakistan has raised fuel prices – a measure that is testing out Prime Minister Imran Khan’s government, elected last year amid lingering worries about the state of the economy.
The expected budget deficit of the country is likely to be 7.2 percent, which is feared to balloon further next year while inflation will be high at 7.6 percent, despite a projected 6 percent.
According to the Fund, the current account deficit of the country would remain 5.2 percent this year and 4.3 percent next year. The South Asian country may continue to face unemployment at 6.2 percent in the current year.
The finance institution recommends a series of measures for Pakistan to lift its economic indicators.
