IMF predicts decline in inflation, employment for Pakistan

ISLAMABAD: The International Monetary Fund (IMF) predicted a decline in inflation and employment rates for Pakistan in a report published its World Economic Outlook Report for 2024.

The report revealed optimistic projections for the beleaguered country’s economy, with the public suffering skyrocketing prices and one of worst inflation in Pakistan’s history.

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The report calculated that the country’s economic growth will reach 3.2 per cent in the current fiscal year (FY), a rise from 2.4 per cent recorded in previous one.

The prediction is based on onging economic reforms and stabilisation efforts, aimed at mitigating the impact of high inflation and fiscal imbalances.

The international money lender forecasted that the average inflation rate in Pakistan would decrease to 9.5 per cent in current FY. This will be a drop of 23.4 per cent experienced in the last FY.

The reduction is expected to re4sult from improved supply chain dynamics,stabilisation of food prices, and effective monetary policies implemented by the State Bank of Pakistan (SBP).

The previous year’s inflation was driver by escalating global community prices and local supply chain disruptions, with the Covid-19 pandemic exacerbating economies globally.

The IMF also projected a decline in the unemployment rate. It estimated a decline of 7.5 per cent in the FY 2024-25, down from 8 per cent in the previous.

The decline is linked to a gradual recovery across different sectors of the country,  including agriculture, manufacturing and services, as the economy stabilises and investment begins again.

The report also addresses the current account deficit, which is projected to widen to negative 0.9 per cent in the FY 2024-25. This is in contrast to the negative 0.2 per cent in the previous year.

The increase is attributed to rising imports and a slower-than-expected recovery in exports, influenced by global economic conditions and domestic challenges.

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The IMF’S World Economic Outlook Report provides in-depth and detailed information of every country’s economy. It can be used as a guide by policymakers and even local economists to understand the global and individual country’s economic landscape and use it to promote sustainable growth.