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Print Print 2022-10-12

Inflation rate at 19.9pc: IMF projects 3.5pc growth for 2023

  • Current account balance is projected at negative 2.5 per cent for 2023 compared to negative 4.6per cent for 2022
Published October 12, 2022

ISLAMABAD: The International Monetary Fund (IMF) has projected GDP growth rate for Pakistan at 3.5 percent for 2023 against six percent in 2022, but it does not include the impact of the recent floods.

The IMF World Economic Outlook (WEO) report “World Economic Outlook Countering the Cost-of-Living Crisis,” stated that the 2022 projections for Pakistan are based on information available as of the end of August and do not include the impact of the recent floods.

The Fund has projected inflation rate at 19.9 percent for 2023 against 12.1 per cent in 2022. However, the report has projected consumer prices for the end of period of 2023 at 15 per cent against 21.3per cent in 2022.

The current account balance is projected at negative 2.5 per cent for 2023 compared to negative 4.6 per cent for 2022.

The Fund has projected an increase in unemployment in Pakistan to 6.4 per cent in 2023 compared to 6.2 per cent in 2022.

Average inflation in Pakistan to clock in at 19.9% in FY23, IMF expects

The Fund stated that global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering Covid-19 pandemic all weigh heavily on the outlook.

Global growth is forecast to slow from 6.0 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023. This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the Covid-19 pandemic.

Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 per cent in 2023 and to 4.1 percent by 2024. Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy. Structural reforms can further support the fight against inflation by improving productivity and easing supply constraints, while multilateral cooperation is necessary for fast-tracking the green energy transition and preventing fragmentation, it added.

Copyright Business Recorder, 2022

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