IMF predicts Pakistani economy to grow at 4.5%

13 Aug '15

2 min read

The International Monetary Fund (IMF) has given a thumbs up to Pakistan for its efforts to boost the economy. It has forecast Pakistan'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, IMF senior economist at the conclusion of the IMF's country review in Dubai recently.

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. 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,” Finger said in his report.

He said that despite declining exports, the external current account deficit narrowed to 0.8 per cent of GDP in FY 2014/15 owing to favourable oil prices and strong growth of remittances.

Finger also mentioned that foreign exchange reserves of the State Bank of Pakistan continued to increase at a healthy pace, and reached $13.5 billion at end-June 2015, covering three months of imports.

Following the successful review under Extended Fund Facility (EFF), the decks were cleared for the IMF to release a tranche of $502 million in the next couple of months. (SH)

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