The International Monetary Fund (IMF) announced on Tuesday that Pakistan’s economic growth is anticipated to reach 3.5% for the current fiscal year. This projection comes as part of the IMF’s latest global economic outlook report, emphasizing Pakistan’s economic targets and broader international trends.
In alignment with the government’s goals outlined in the new budget, Pakistan aims for a growth rate of 3.6%, reflecting an optimistic trajectory compared to last year’s 2% growth rate. Concurrently, the IMF’s global economic forecast predicts a 3.3% expansion worldwide.
India’s GDP is projected to grow by 6.5% this year, with China expected to achieve a 4.5% growth rate. However, global economic conditions are poised to grapple with persistent challenges such as elevated inflation rates and interest levels.
The IMF report underscores an impending surge in commodity prices globally and anticipates potential interest rate reductions in the latter half of the year. It also identifies external economic risks, emphasizing the gradual normalization of energy and food prices post-pandemic.
IMF Pushes for Further Reforms in Pakistan
Recently, the IMF intensified its calls for Pakistan to enhance transparency within government institutions as part of ongoing negotiations for a new bailout package. Despite Pakistan’s adherence to stringent conditions in the latest budget, the IMF persists in demanding additional reforms.
Specifically, the IMF advocates for a 45% tax levy on agricultural income and the removal of exemptions in the livestock sector. Challenges have arisen in privatizing profitable state-owned enterprises (SOEs), particularly concerning objections from Gulf nations over government-level sales.
Sources within the IMF highlight concerns over exemptions outlined in the Privatization Commission Ordinance, the Public Procurement Regulatory Authority (PPRA) laws, and SOEs regulations pertaining to share sales.
The upcoming months are crucial as Pakistan navigates through economic reforms and strives to meet international benchmarks set by the IMF, while global economic conditions continue to evolve.
