Washington DC September 28 2024: International Monetary Fund (IMF) lowers Pakistan’s inflation forecast to single digit from previous estimate of 12.7 percent for fiscal year 2025, according to fund’s press release.
IMF now expects Pakistan’s average consumer price for fiscal year 2025 to be 9.5 percent with period ending consumer price of 10.6 percent.
IMF Exeuctive Directors supported continued tight and data-driven monetary policy to ensure that inflation continues moving toward the target range on a sustained basis.
IMF projects Pakistan growth rate at 3.2 percent for FY2025 compared to 2.4 percent in last year while sees reduction in unemployment rate to 7.5 percent from 8.0 percent in FY2024.
The Executive Board of the International Monetary Fund (IMF) concluded the 2024 Article IV consultation with Pakistan and approved a 37-month Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan in the amount of SDR 5,320 million (or around USD 7 billion). The Fund’s immediate disbursement will be SDR 760 million (or about USD 1 billion).
Pakistan has taken key steps to restoring economic stability with consistent policy implementation under the 2023-24 Stand-by Arrangement (SBA). Growth has rebounded (2.4 percent in FY24), supported by activity in agriculture, while inflation has receded significantly, falling to single digits, amid appropriately tight fiscal and monetary policies. A contained current account and calm foreign exchange market conditions have allowed the rebuilding of reserve buffers. Reflecting disinflation and steadier domestic and external conditions, the State Bank of Pakistan has been able to cut the policy rate by a total of 450 bps since June also supported by an appropriately tight FY25 budget.
