ISLAMABAD: The International Monetary Fund (IMF) has projected Pakistan’s economy to grow at a rate of 3.5% in the fiscal year 2024-25 (FY25), slightly below the government’s target of 3.6%, amidst subdued global economic conditions.
According to the IMF’s World Economic Outlook (WEO) update, Pakistan’s gross domestic product (GDP) is estimated to have expanded by 2.4% in the previous fiscal year 2023-24, falling short of the government’s 3.5% target as per the economic survey.
Pakistan’s economy faces significant challenges, exacerbated by factors such as the Covid-19 pandemic, repercussions from the war in Ukraine, supply chain disruptions leading to inflation, and severe flooding that affected a third of the country in 2022.
The IMF’s global economic forecast remains cautious, with a projected real GDP growth of 3.2% for 2024 and a slight upward revision to 3.3% for 2025. Despite these adjustments, IMF Managing Director Kristalina Georgieva has warned of persistently modest growth trends, dubbing the era as “the tepid twenties.”
In particular, the IMF revised downward its 2024 growth forecast for the United States to 2.6%, citing slower-than-anticipated first-quarter consumption. Meanwhile, the forecast for China was bolstered to 5.0% for 2024, matching the Chinese government’s target, with a further increase to 4.5% for 2025 due to robust private consumption and strong exports.
The IMF highlighted risks of elevated inflation globally, particularly in services sectors with wage pressures, alongside potential geopolitical tensions affecting supply chains and trade dynamics.
Pierre-Olivier Gourinchas, IMF Chief Economist, noted a convergence in growth among major advanced economies, with the US cooling and Europe showing signs of recovery.
