Islamabad:
The International Monetary Fund (IMF) lowered Pakistan growth forecasts on Tuesday at only 2.6% for the current financial year, while revising global economic projections in a context of uncertainty from the measures of the commercial price of the American president Donald Trump.
In its report on the global economic prospects of April 2025, the IMF has reduced the estimate of Pakistan growth by 3% to 2.6%, becoming the second major international financial institution to reduce the country’s growth prospects for exercise 2024-25.
The revised forecasts are significantly lower than the growth target of 3.6% set by the Pakistani government for the exercise. For the next exercise, the IMF sees the economic growth of Pakistan reaching 3.6%.
However, he improved Pakistan inflation prospects by almost 10% to 5.1%, which should also remain 7.7% in the next fiscal year. In another positive development, the IMF has improved the projection of the Pakistan’s current account deficit by almost 1% of GDP only 0.1%.
The IMF expected Pakistan’s current account deficit as soon as possible to widen $ 3.7 billion, which should now fall to around $ 400 million for this exercise. For the next exercise, the current account deficit is provided only 0.4% of the size of the economy.
The IMF will publish the detailed context of its revised projections in the country’s staff level, which will be published after the approval of the second loan tranche by the IMF board next month.
The Minister of Finance, Muhammad Aurangzeb, met on Monday the director general of the IMF, Kristalina Georgieva, in Washington.
A Ministry of Finance Document said that Aurangzeb thanked the IMF team for concluding an agreement at the staff level on the first examination under extended fund (EFF) and a new arrangement under Resilience and Sustainability Facility (RSF).
Aurangzeb reiterated the Pakistani government’s commitment to maintain the dynamics of the reform and extended an invitation from Prime Minister Shehbaz Sharif to Georgieva to visit the country, the Ministry of Finance said.
The Minister of Finance also organized a meeting with Robert Kaproth, deputy secretary of the US Treasury Department, and informed him of improving macroeconomic indicators from Pakistan. He underlined the current reforms on taxation, energy, privatization, public enterprises (public enterprises), pensions and debt management.
In an interview with Bloomberg in Washington, the Minister of Finance Aurangzeb said on Tuesday that Pakistan sought to buy more goods in the United States and to withdraw non-tariff obstacles to escape the high prices of President Donald Trump.
Global prospect
The IMF gave a range of 2.4% to 2.8% for global economic growth of 2025 due to the uncertainty caused by President Trump’s commercial policy measures.
The rapid climbing of trade tensions has generated extremely high levels of political ambiguity, which makes it more difficult than usual to establish a prospect of global growth, reads the IMF report.
He said that because of this reason, global economic prospects have a range of global growth projections. Reference forecasts are based on measures announced on April 4, which, according to the IMF, would reduce global growth to 2.4%.
Forecasts based on the post-April 9 model are used to quantify the implications of the announced break and associated additional exemptions, as well as the climbing rate rates between China and the United States, economic growth is projected at 2.8%.
