The IMF on Friday forecast Pakistan’s country’s economy to increase to 4.5 per cent this fiscal, citing macroeconomic stability, low global oil prices, planned improvements in the domestic energy supply and investment related to the China-Pak Economic Corridor.
“Pakistan’s economy continues to improve,” said Harald Finger of the Washington DC-based International Monetary Fund (IMF) at the conclusion of the IMF’s country review in Dubai from July 29-August 7.
Finger led the IMF delegation while the Pakistani team was led by its Finance Minister Ishaq Dar and State Bank of Pakistan (SBP) Governor Ashraf Wathra.
“Real GDP growth is expected to increase to 4.5 per cent this fiscal year, helped by macroeconomic stability, low oil prices, planned improvements in the domestic energy supply, and investment related to the China-Pakistan Economic Corridor,” Finger said.
“Inflation dropped to 1.8 per cent in July, but is expected to increase in the coming months with the anticipated stabilisation of commodity prices,” he said.
He added that despite declining exports, the external current account deficit narrowed to 0.8 per cent of GDP in the financial year 2014-15 owing to favourable oil prices and strong growth of remittances.
Following the country review, IMF and Pakistan reached an agreement on disbursement of another USD 502 million in financial assistance to Pakistan.
In a statement, IMF welcomed Pakistan’s plan to continue strengthening public finances and external reserve buffers, and to accelerate efforts to widen the tax net to create space for infrastructure investment and social assistance.
In addition, efforts continue to restructure loss-making public enterprises, including through strategic partnerships with the private sector, advance the energy sector reform, improve the business climate, and further expand coverage under Benazir Income Support Programme (BISP) to protect the most vulnerable, Finger said.