AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

ISLAMABAD: The International Monetary Fund (IMF) has projected 3.5 percent GDP growth for the current fiscal year against the budgeted 5 percent.

The Fund report – combined seventh, and eighth reviews of the Extended Arrangement under the Extended Fund Facility (EFF) – uploaded on Friday did not take note of the devastating floods that have inundated one third of the country with 33 million displaced.

The IMF further noted that the pass-through of energy prices will have some dampening effect on activity while fiscal consolidation and the loss of purchasing power due to high inflation are expected to restrain domestic demand notably.

Headline inflation – CPI – is projected by the Fund at 19.9 percent for the current fiscal as international commodity prices are passed on to domestic consumers against the budgeted projection of 11.5 percent. Core inflation is also projected to remain elevated due to higher energy prices and sizable depreciation. With tighter monetary and fiscal policies firmly entrenched, inflation is expected to fall significantly in fiscal year 2024, supported by favorable base effects and fiscal deficit at 4.6 percent.

The current account deficit is projected to narrow to 2.5 percent for the current fiscal year against 4.7 percent of a year before, reflecting monetary, fiscal, energy policies consistent with moving demand to sustainable levels, and supported by the continued commitment to a market-determined exchange rate.

IMF, floods & economy

Debt is projected at 72.1 percent as opposed to 78.9 percent for the last fiscal year and external debt is projected to increase to 37 percent of the GDP in fiscal year 2023 from 32.5 percent in 2021-22 reflecting heavy reliance on external borrowing.

The IMF added that the amendments to the Fiscal Responsibility and Debt Limitation Act, supported by World Bank and IMF TA and signed into law in June 2022 after National Assembly passage, will institutionalize the establishment of a central Debt Management Office (DMO).

This would empower the DMO to implement the agreed medium-term debt management strategy (MTDS), which will be updated annually. Gross official reserves are projected at $16.2 billion for the current fiscal year.

The Fund warned that social unrest fuelled by increasing prices and shortages of essentials, rising inequality, inadequate healthcare, financial and social scars from the prolonged pandemic, and heavier household debt burdens amid rising interest rates may trigger political instability, capital outflows, higher unemployment, and slower economic growth.

Copyright Business Recorder, 2022

Comments

Comments are closed.

Zubair Hameed Sep 03, 2022 12:53pm
What about the Government's inability to convey and convince the IMF for relief in loans due to floods?
thumb_up Recommended (0)
Ruhail Muhammad Baloch Sep 04, 2022 02:56pm
We don't expect any positive and healthy comments or miracles as what ever IMF has proposed is not new same old stereo type terms and conditions. IMF may like to visit the flood hit areas can see the level of devastation and losses which are beyond human imagination.
thumb_up Recommended (0)