Pakistan’s economy is expected to experience a significant growth of 2.4 percent in the current fiscal year, a marked improvement from the 0.17 percent contraction seen in the previous year, according to the government’s economic survey. This growth estimate aligns with the projection made by the State Bank of Pakistan for the full year. The SBP recently lowered its key interest rate by 150 basis points, marking its first rate cut in almost four years as part of efforts to stimulate economic growth.
The country’s current account deficit has also narrowed significantly, decreasing 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. The Finance Minister stated that the current account recorded surpluses for three consecutive months until April, with the possibility of another surplus in May. The government aims to achieve an economic expansion of 3.6 percent in the upcoming fiscal year as economic activity picks up.
Pakistan is currently engaged in discussions with the IMF for a potential loan ranging from $6 billion to $8 billion to prevent a default in an economy that is growing at a sluggish pace compared to its regional peers. Prime Minister Shehbaz Sharif has emphasized the need for tough reforms to secure the IMF loan, despite challenges such as high prices, unemployment, and a lack of new job opportunities that have put pressure on his coalition government. Sharif’s administration has pledged commitment to implementing necessary reforms to address these issues and secure sustainable economic growth for Pakistan.
