In the latest update, the International Monetary Fund (IMF) changed its prediction for Pakistan’s economic growth to 2% for this fiscal year, down from the previous estimate of 2.5%, as reported by The News.

This adjustment suggests that the income per person in dollars is likely to decrease because the population is growing at 2.6%. If the actual economic growth stays at 2%, the income of Pakistanis won’t see any increase in dollar terms.

According to the IMF’s World Economic Outlook (WEO) report, Pakistan’s GDP growth rate is expected to be 2% for the current fiscal year (FY24), and a growth rate of 3.5% is projected for the next fiscal year (FY25).

Globally, economic growth is forecasted to be 3.1% in 2024 and 3.2% in 2025, showing a slight improvement from the October 2023 projection. However, it remains below the average of 3.8% seen from 2000 to 2019 due to various factors like high central bank policy rates, reduced fiscal support, and low productivity growth.

Inflation is decreasing faster than anticipated in many regions, and global headline inflation is expected to drop to 5.8% in 2024 and 4.4% in 2025. The risks to global growth are considered balanced, with potential positive impacts from faster disinflation and structural reforms, but also potential downsides from commodity price spikes, supply disruptions, and geopolitical shocks.

Policymakers are currently focused on managing inflation, adjusting monetary policy, and considering fiscal consolidation. Efforts toward structural reforms are emphasized to enhance productivity growth, ensure debt sustainability, and move towards higher income levels.

Improved international collaboration is highlighted, especially in addressing debt issues, preventing debt troubles, and tackling the challenges of climate change.

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