IMF expects an economic growth rate of 1.5% in Pakistan

Pakistan’s GDP growth is expected to be 1.5 percent in 2021 and 4 percent in 2022, according to the International Monetary Fund (IMF), which expects a greater economic turnaround in 2021 as Covid-19 vaccine rollouts begin.

The international organization’s 1.5 percent projection contrasts sharply with the State Bank of Pakistan’s updated 3 percent GDP growth forecast issued only a few days earlier. The IMF’s projections are in line with the World Bank’s, which forecasts 1.3 percent inflation for the current year.

The IMF predicts that economic growth will return to 4 percent of GDP next year (FY2022) and 5 percent by 2026. According to the study, inflation will fall from 10.2 percent last year to 8 percent this year and 10 percent on average by FY2022.

China, the only global economy to return to pre-pandemic GDP in 2020 with an optimistic growth rate of 2.3 percent, is expected to rise by 8.4 percent in 2021 and 5.6 percent in 2022. India, on the other hand, is expected to rebound more quickly, with growth of 12.5 percent in 2021 and 6.9 percent in 2022, according to financial institution.

Governments should aim to work on “escaping the crisis” by offering budgetary assistance, particularly to their health-care systems, according to the institution. It went on to say that in the second process, “policymakers would need to reduce long-term economic scarring” caused by the recession and increase public spending.