In the midst of weak global growth, the International Monetary Fund (IMF) predicted that Pakistan’s economy would expand at a pace of 3.5% in the fiscal year 2024–25 (FY25), as opposed to the government’s aim of 3.6%, which was declared in the budget.
Pakistan’s GDP may have grown by 2.4% in the most recent fiscal year (2023–24), falling short of the 3.5% objective, according to the government’s economic assessment for the previous fiscal year.
Pakistan’s economy, which has been suffering from long-term mismanagement, is on the verge of collapse due to the Covid-19 epidemic, the consequences of the conflict in Ukraine, supply constraints that have caused inflation, and historic floods that will devastate a third of the nation in 2022.
In a World Economic Outlook (WEO) report, the IMF cautioned that although there are many obstacles in the way, the global economy is expected to grow modestly over the next two years due to cooling activity in the US, a bottoming-out in Europe, and greater consumption and exports from China.
The IMF increased its prediction for 2025 by 0.1 percentage points to 3.3% while maintaining its April estimate for the real gross domestic product growth in 2024 at 3.2%.
Forecasts fail to move growth away from the drab levels that, according to IMF managing director Kristalina Georgieva, would send the country into “the tepid twenties.”
The updated prediction for US growth in 2024 was lowered by 0.1 percentage point to 2.6%, however, due to lower-than-expected first-quarter consumption. This indicated some shifting sands among the big economies.
The Fund maintained its 1.9% growth estimate for the US in 2025, noting that the economy will contract due to a cooling labor market and declining expenditure as a result of restrictive monetary policy.
In a blog post that accompanied the report, IMF chief economist Pierre-Olivier Gourinchas stated, “Growth in major advanced economies is becoming more aligned as output gaps are closing.” He also mentioned that Europe was about to perk up, while the US was beginning to show indications of cooling.
Due to a robust export market and a first-quarter rebound in private spending, the IMF raised its growth prediction for China dramatically from 4.6% in April to 5.0%, which matches the Chinese government’s annual objective. In April, the IMF revised up its estimate of China’s growth to 4.5% in 2025 from 4.1%.
