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IMF Revises Pakistan’s Economic Growth Forecast to 3%, Below Target
IMF lowers Pakistan's growth forecast for the current fiscal year to 3%, below the 3.6% target, but predicts recovery in the next fiscal year.
ND
by News Desk
2025-01-18
IMF Revises Pakistan’s Economic Growth Forecast to 3%, Below Target

The International Monetary Fund (IMF) has revised Pakistan’s economic growth forecast for the current fiscal year, lowering it from 3.2% to 3%. The revised outlook, detailed in the IMF’s latest World Economic Outlook report, suggests that Pakistan’s growth target of 3.6% for the fiscal year will not be achieved.

Despite this adjustment, the IMF predicts a slight improvement in Pakistan’s economic performance compared to the previous fiscal year when the growth rate stood at 2.5%. Furthermore, the IMF forecasts a significant recovery, with a growth rate of 4% for the next fiscal year.

Key Figures from the IMF Outlook

  • Current fiscal year’s revised growth rate: 3%
  • Pakistan’s target growth rate: 3.6%
  • Previous fiscal year’s growth rate: 2.5%
  • Next fiscal year’s predicted growth rate: 4%

The report also reflects a modestly optimistic outlook for Pakistan’s economy in the longer term, citing potential for recovery if structural reforms and fiscal discipline are maintained.

Economic Challenges and Prospects

Pakistan’s economy has faced numerous challenges, including inflation, high fiscal deficits, and external account pressures. The IMF’s downgrade underscores the need for effective economic policies to address these issues.

In October 2024, the IMF had estimated Pakistan’s growth rate at 3.2%. The further downgrade to 3% reflects the impact of continued economic hurdles, including a lack of foreign exchange reserves, high interest rates, and energy sector inefficiencies.

Government’s Response

Pakistan’s government had set an ambitious growth target of 3.6% for the current fiscal year. Officials remain confident that ongoing reforms and efforts to attract foreign investment, particularly through initiatives like the Special Investment Facilitation Council (SIFC), will bolster economic recovery in the coming months.

IMF Recommendations

The IMF has urged Pakistan to prioritize fiscal discipline, expand its tax base, and implement structural reforms to stabilize the economy and enhance its growth trajectory. The report emphasizes the importance of maintaining strong ties with international financial institutions to support economic resilience.

As the nation navigates these challenges, the revised forecast serves as a call to action for policymakers to accelerate reform efforts and ensure sustainable growth in the years to come.
Tagged:

PakistanEconomy

EconomicGrowth

IMFReport

FiscalReforms
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