Pakistan has informed the International Monetary Fund (IMF) that it is expected that the economy will grow by 3.1 % in the current fiscal year, with a largely balanced current account supported by increased transfers.
According to reports, the government plans to continue economic stability policies in the coming fiscal year with a higher growth rate.
During a briefing on the mission of the International Monetary Fund, the Ministry of Finance set its total economic forecast from 2024-25 and 2025-26, as it provided a framework for fixed economic expansion.
Officials indicated that the goal of economic growth next year may be determined by 4.5 %, as inflation is expected to remain about 7 %. However, these figures are subject to approval by the Federal Cabinet and the National Economic Council.
The growth of the current fiscal year decreases by 3.1 % of the responsible target by 3.6 %, but is in line with the estimates of international financial institutions. The Ministry of Finance expects the services sector to be the main driver of this growth, while the agricultural sector is expected to expand only 1.3 %.
However, the economy is still vulnerable to climate risk such as floods and dehydration, which can disrupt agriculture, infrastructure and general economic stability.
The inflation for the continuous fiscal year is expected to remain in a range of 6-7 %, which is much lower than the original 12 % target. The factors that contribute to this decrease include a high basic effect, a stable exchange rate, and the prices of non -damaged foodstuffs. The government expects inflation to follow a similar path in the coming fiscal year.
Despite these expectations, economic activity was slow in the first quarter of 2024-25, with a growth rate of only 0.92 %. It is expected that the growth of the nominal GDP will reach 11.5 %, but analysts indicate that it may remain in one numbers if inflation and GDP growth decreases from revised estimates. This may affect the collection of the revenue of the Federal Revenue Council (FBR), which is expected to be reviewed down to 12.48 trillion rupee. FBR has already missed its goal for eight months by 606 billion rupees, collecting 7.34 trillion rupees.
The government confirmed to the International Monetary Fund University that the Pakistani current account deficit will remain minimal, ranging from 130 million dollars to 500 million dollars – by 0.1 % of GDP. This is a noticeable improvement of last year’s deficit of $ 1.7 billion. However, the authorities acknowledged that the balance was partially preserved through restricted imports, as the country continues to confront foreign currencies.
For the next fiscal year, the government expects that the current account deficit will expand slightly to 3 billion dollars, or 0.7 % of GDP. This projection depends on improving exports, controlled imports, fixed basic income, and strong workers’ transfers. The government estimated exports at $ 33 billion for this fiscal year, while imports are expected to reach $ 59 billion.
