By Ahmed Mukhtar Naqshbandi
ISLAMABAD: The International Monetary Fund (IMF) has downgraded Pakistan’s GDP growth rate projection from 3.5 percent to 2 percent for the ongoing fiscal year.
At the same time, India’s outlook remains strong with unchanged predictions for a decline in growth to 6.1 percent in 2023, but a rebound to 6.8 percent in the next year (2024), matching its performance in 2022.
Pakistan GDP to rebound in 2023-24
According to the IMF’s World Economic Outlook, the Pakistan’s GDP growth rate would rebound in the 2023-24 fiscal year up to 4.4 percent. The projection by the IMF, which is currently in negotiations with Pakistan for the revival of the loan programme stalled since months, is the same as was predicted by the World Bank earlier January.
In a report, titled “Global Economic Prospects” released on January 12, the World Bank predicted Pakistan’s economic growth to decline to half — down by 4 percent to 2 percent — for the 2022-23, owing to the devastating floods and precarious economic situation.
The IMF said growth would still dip to 2.9 percent in 2023 from 3.4 percent last year, but its latest WEO forecasts mark an improvement over an October prediction of 2.7 percent growth in 2023 with warnings that the world could easily tip into recession.
For 2024, the International Monetary Fund said global growth would accelerate slightly to 3.1 percent. In its 2023 GDP predictions, the IMF said it now expected United States GDP growth of 1.4 percent, up from 1 percent predicted in October 2022 and following 2 percent growth in 2022.
Britain was the only major developed economy the IMF forecast to be in recession in 2023, with a 0.6 percent dip in GDP as households struggle with rising living costs that included mortgages and energy.
The International Monetary Fund revised China’s growth outlook sharply higher for the current year to 5.2 percent from 4.4 percent in the forecast in October after “zero-COVID” lockdown policies in 2022 affected China’s growth rate to 3 percent — a pace below the world average for the first time in more than 40 years. But the boost from renewed mobility for Chinese people will be short-lived.
The IMF added that China’s growth will “fall to 4.5 percent in 2024 before settling at below 4 percent over the medium term amidst slow progress on structural reforms and shrinking business.
