IMF lowers Pakistan's GDP growth to 2.6pc for FY25

ISLAMABAD: The International Monetary Fund (IMF) has revised downward GDP growth for Pakistan to 2.6 per cent for the outgoing fiscal year 2024-25 from the October projection of 3.2pc.

The projection has been lowered based on the weaker activity in first half (H1) and broader global uncertainty.

In its latest report, the global lender, in first review under the Extended Fund Facility (EFF) arrangement, requests for modification of performance criteria, and for an arrangement under the Resilience and Sustainable Facility (RSF).

It noted that there was a 2.5pc GDP growth in fiscal year 2024, growth slowed somewhat in H1, recording 1.3pc and 1.7pc (yoy) in fiscal year Q1 and Q2, respectively, reflecting lower yields from the major Kharif crops and still-subdued industrial activity.

Current expenditure was as per the Fund programme 18.9pc of GDP while current projection is the same (even though the growth has been downgraded from the program projection) though for next year the projection is 17.8pc however the realisation of this would depend on achieving the projected growth rate of 3.6pc.

The international financial institution projected that Pakistan’s external financing gap is expected to surge to $31.4 billion by the fiscal year 2027-28. It has also projected that the country’s gross foreign reserves would be standing at $23 billion by 2027-28, so it will become an acute challenge for meeting the financing gap of over $31 billion in the same year of 2027-28.

The IMF staff report believes that there will be zero privatisation receipts until 2030.