IMF projects Pak economic growth at 4.5%

08 Feb '16

2 min read

Pakistan's economy will grow at 4.5 per cent in the current fiscal despite a decline in exports and challenging external environment weighing on the country's growth prospects, the International Monetary Fund 's(IMF) mission chief to Pakistan Harald Finger said in a statement.

“A weak cotton harvest, declining exports and a more challenging external environment are weighing on the growth prospects of Pakistan,” he said.

Pakistan's cotton output has been badly hit after it lost an estimated 11 million bales due to pest attack and rain.

Despite these challenges, the real GDP growth is expected to reach 4.5 per cent in FY 2015/16, helped by lower oil prices, planned improvements in the energy supply, investment related to the China Pakistan Economic Corridor (CPEC), buoyant construction activity, and acceleration of credit growth.

"Economic activity remains robust," Finger said after a meeting with Pakistani officials in Dubai for the 10th review of Pakistan's economic programme supported by a three-year Extended Fund Facility (EFF) arrangement.

Finger said the mission and the Pakistani authorities have reached a staff-level agreement on the completion of the 10th review under the EFF arrangement.

The agreement is subject to approval by the IMF management and the executive board. Upon completion of this review, about $497 million will be made available to Pakistan.

Pakistan's gross international reserves reached $15.9 billion in December 2015, up from $15.2 billion at end-September the same year, and covering close to four months of prospective imports, Finger's statement said. (SH)

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