Pakistan’s Economy On The Rebound: Government Predicts 2.4% Growth and IMF Loan Possibility

Economic survey reveals Pakistan’s economy projected to grow by 2.4% in fiscal year 2024

Pakistan’s economy is projected to grow by 2.4 percent in the current fiscal year, a significant improvement from the 0.17 percent contraction seen in the previous year, according to the government’s economic survey. The Finance Minister mentioned that the current account recorded surpluses for three consecutive months until April, with the possibility of another surplus in May. The SBP recently lowered its key interest rate by 150 basis points, marking its first rate cut in almost four years as part of its efforts to stimulate economic growth.

The country’s current account deficit has also seen a notable improvement, narrowing by 95 percent to $200 million in the July to April period of the current fiscal year from $3.9 billion in the same period a year earlier. This growth estimate aligns with the State Bank of Pakistan’s projection for the full year. Sharif’s administration has pledged commitment to implementing necessary reforms to address these issues and secure an IMF loan ranging from $6 billion to $8 billion.

Pakistan is engaged in discussions with the IMF for a potential loan, with challenges such as high prices, unemployment, and a lack of new job opportunities putting pressure on the coalition government. Despite this pressure, Sharif has emphasized that tough reforms are necessary to secure an IMF loan and prevent a default in an economy that is growing at a sluggish pace compared to its regional peers.

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