The International Monetary Fund (IMF) has projected Pakistan’s GDP growth to reach 3.2% in FY25, up from 2.4% in the previous fiscal year.
This outlook surpasses the Asian Development Bank’s (ADB) prediction of 2.8% growth for the current fiscal year.
The IMF report highlights a significant reduction in inflation, thanks to tight fiscal and monetary policies. It expects inflation to decrease to 9.2% in FY25, down from 23.4% in FY24. The current account deficit is forecasted to remain moderate, rising slightly to 0.9% of GDP by FY25, from 0.2% in FY24.
The unemployment rate is expected to fall from 8% to 7.5% by June 2025. The IMF also anticipates Pakistan’s foreign exchange reserves to rise to $12.757 billion by June 2025, up from $9.38 billion in FY24.
These projections follow the IMF’s approval of a 37-month, $7 billion Extended Fund Facility for Pakistan. The State Bank of Pakistan (SBP) has already received the first tranche of $1.03 billion, which will be reflected in reserve data set to be released on October 3, 2024.
Despite these improvements, the IMF warns that Pakistan continues to face significant structural challenges and economic vulnerabilities.