Pakistan’s economic growth rate will stay at 1.5 percent in 2021, says the World Economic Outlook Report released by the International Monetary Fund (IMF) on Tuesday.
The revised 3 percent GDP growth forecast released a few days ago by the State Bank of Pakistan contrasts sharply with the 1.5 percent growth prognosis by the IMF. The World Bank has predicted growth of 1.3 percent for the current year, which is consistent with the IMF’s predictions.
The Washington-based financing agency, in its World Economic Outlook (WEO) 2021 report, forecasted an average inflation rate of 8.7 percent, a current account deficit of 1.5 percent of GDP, and an increase in unemployment from 0.5 percent to 5 percent in the current fiscal year. This is in stark contrast to the government’s goals for the current year, which are a 2.1 percent GDP growth rate, a 6.5 percent inflation rate, and a 1.6 percent current account deficit.
According to IMF projections, economic growth rate will rebound to 4 percent of GDP in FY2022 and 5 percent by 2026. By FY2022, the inflation rate is predicted to drop from 10.2 percent last year to 8 percent on average and 10 percent annually. According to the Fund, the current account deficit will increase from 1.1 percent of GDP in FY2020 to 1.5 percent in FY2021, then climb to 1.8 percent in FY2022 and reach a peak of 2.9 percent of GDP by 2026.
The pace and synchronization of 2020’s activity decrease were unheard of in recent memory. That might have been far worse, though. IMF staff estimates indicate that, absent exceptional policy support, the downturn might have been three times larger, while exact figures are difficult to determine.
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