IMF reduced Pakistan’s GDP forecast for FY23 to 0.5%.

The International Monetary Fund (IMF) has reduced Pakistan’s GDP growth rate projection for the current fiscal year from 2% to 0.5%. (FY23).

According to the Fund’s latest report, “World Economic Outlook (WEO): A rocky recovery,” released on Tuesday, Pakistan’s GDP is expected to be 3.5 percent in FY24, down from 6 percent in FY22.

The Fund has raised its inflation rate projection for the current fiscal year, as annual averages, to 27.1 percent from 19.9 percent previously. Consumer prices rose 12.1 percent in FY22 and are expected to rise 21.9 percent in FY24, according to the report.

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Unemployment in the country is expected to rise to 7% in 2023, up from 6.2 percent in 2022, with a further increase to 6.8 percent in 2024.

The current account balance, as a percentage of GDP, is expected to be negative 2.3 percent in FY23, down from negative 4.6 percent in FY22, and negative 2.4 percent in FY24.

Also Read: Pakistan’s Economic growth expected to slow in FY23

Another report released today by the Fund, “Global Financial Stability Report: Safeguarding Financial Stability Amid High Inflation And Geopolitical Risks,” stated that exchange rates in several frontier markets (Egypt, Ghana, and Pakistan) have weakened significantly due to market pressure or official devaluations, with a growing divergence between official and parallel market rates in some cases.