The International Monetary Fund has projected Pakistan’s GDP growth rate at 4 per cent in 2022 from a projected rate of 1.5 per cent in 2021.
The Fund that recently released a $500 million tranche to Pakistan also projected an increase in inflation this year which would decline by 2022 to 8.7 per cent.
In its World Economic Outlook report — released at the start of the IMF’s and World Bank’s spring meetings — the Fund shared that the GDP growth for Pakistan remained at negative -0.4 percent during 2020.
The IMF report said that inflation will decline from 10.7 per cent in 2020 to 8.7 per cent in 2021. Inflation will further reduce to 8 per cent in 2022.
The current account balance is projected at -1.5 per cent of the GDP for 2021 against -1.1 per cent in 2020 and -1.8 per cent is projected for 2022.
The Fund has projected unemployment at five percent for 2021 against 4.5 percent in 2020, and projected at 4.8 percent for 2022.
‘Stronger Global Growth’
The IMF, in its report, said unprecedented public spending to fight the COVID-19 pandemic, primarily by the United States, would push global growth to 6 per cent this year, a rate unseen since the 1970s.
The IMF raised its 2021 growth forecast from 5.5 per cent less than three months ago, reflecting a rapidly brightening outlook for the US economy, which the IMF now sees growing by 6.4 per cent in 2021 — the fastest since the early 1980s.
The US forecast was raised by 1.3 percentage points from the IMF’s 5.1 per cent 2021 projection in late January and nearly double the rate it estimated last October.
IMF Chief Economist Gita Gopinath said the improvement was largely due to increased fiscal support, including a new $1.9 trillion US aid package, accelerated vaccinations and continued adaptation of economic activity to overcome pandemic restrictions.
“Even with high uncertainty about the path of this pandemic, a way out of this health economic crisis is increasingly visible,” Gopinath told a news conference.
However, she warned that the pandemic was still far from defeated and coronavirus cases were still rising in many countries.
“Recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support and more reliance on tourism do less well,” Gopinath said.
Forecasts for emerging market economies, while somewhat improved, lagged well behind their developed peers, rising just 0.4 percentage point – half of the advanced economy mark-up – to 6.7 per cent from the view in January.
If realised, the IMF’s 6 per cent global growth forecast for 2021 would mark the fastest pace since 1976 but also comes off the steepest annual downturn of the post-war era last year as the pandemic brought commerce around the world to a near stand-still at times. The Fund said the world economy contracted 3.3% in 2020, a modest upgrade from an estimated contraction of 3.5 per cent in its January update.
