The International Monetary Fund (IMF) has revised GDP growth rate projection downward for Pakistan by 0.5 percent to 2 percent for 2024.
The Fund in its latest report “World Economic Outlook Update, moderating inflation and steady growth open path to soft landing”, also revised GDP projection downward by 0.1 percent for the next fiscal year to 3.5 percent.
In October 2023, the Fund had projected GDP growth rate for Pakistan at 2.5 percent for 2024.
The Fund projected global growth at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 on account of greater-than expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China.
The forecast for 2024–25 is, however, below the historical (2000–19) average of 3.8 percent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy.
Global headline inflation is expected to fall to 5.8 percent in 2024 and to 4.4 percent in 2025, with the 2025 forecast revised down. With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth are broadly balanced. On the upside, faster disinflation could lead to further easing of financial conditions.
