Pakistan, grappling with a severe crisis, has revised down its GDP growth projection for the ongoing fiscal year, slashing it from an initial estimate of 2% to a meager 0.29%.
Pakistan Records Record-Breaking Inflation of 36.4% in April. (Representational Image/Photo: Reuters)
Pakistan’s national accounts committee has announced a downward revision in the GDP growth forecast for the ongoing fiscal year, which concludes on June 30.
The country has revised the projection from 2% to a significantly lower 0.29%, citing a slowdown in both the agriculture and industrial sectors as key factors impeding growth.
Amidst economic turmoil and grappling with a balance of payments crisis, Pakistan is currently engaged in negotiations with the International Monetary Fund (IMF) to secure the release of the remaining $1.1 billion from a previously agreed-upon $6.5 billion bailout package established in 2019.
The funds have remained stalled, and reaching an agreement with the IMF is a crucial step for Pakistan to alleviate its financial challenges.
Pakistan’s central bank has indicated that the GDP growth for the financial year 2022-23 is expected to be notably lower compared to the previous year. The growth rate for the previous year was revised upwards to 5.77%.
However, the country is currently facing multiple challenges as it recorded its highest-ever inflation rate of 36.4% in April, and its currency has reached a historical low in terms of depreciation.
The latest GDP growth forecast by the national accounts committee is even lower than the World Bank’s estimate of 0.4%. Similarly, the International Monetary Fund (IMF) projected a growth rate of 0.5% in April.
These projections highlight the economic struggles Pakistan is currently facing, with a significant decline in expected growth for the upcoming fiscal year.