After WB, IMF also raises alarm bells for Pakistan’s economy
As per details garnered, the IMF—in its 2019 World Economic Outlook—cut the global growth outlook again.
The report reads that Pakistan’s GDP growth rate will slow down in the coming fiscal years while the country will witness higher unemployment rates in the future.
The report further reads that Pakistan will record a below par GDP growth rate of 2.9pc in fiscal year 2018-19 whereas the same will drop further to 2.8pc in fiscal year 2019-20.
The budget deficit will stand at 7.2pc in FY 2018-19 while it will augment further in FY 2019-20, read the report.
In the ongoing year, core inflation rate is expected to be 7.6pc against the predicted 6pc by the end of ongoing fiscal year.
Earlier, WB on painted a bleak picture of Pakistan’s economy while predicting 2.7pc GDP growth rate in fiscal year 2019-20.
The prediction came at time when incumbent government is tightening monetary and fiscal policies to curb macroeconomics imbalances.
In its latest edition of the “South Asia Economic Focus, Exports Wanted”, the World Bank cited macroeconomic imbalances, reflected in large fiscal and current account deficits, as the reason behind the projected slowdown in Pakistan’s GDP growth.
“Economic uncertainty has increased due to protracted negotiations with the IMF. In addition, recent regional tensions have had an impact on risk perceptions. The low reserves position and high debt-ratios limit the buffers that Pakistan could use to absorb external shocks (such as an increase in US interest rates) and may negatively impact the government’s ability to access international markets. Reforms to put the country on a stable growth path include increased exchange rate flexibility, improved competitiveness and lower cost of doing business. On the revenue front, reforms to improve tax administration, widen the tax base and facilitate tax compliance are critical”, read the report.