IMF’s FY23 projections for Pakistan fail to account for flood impact

The International Monetary Fund (IMF) on Tuesday further lowered its global economic growth forecast to below 2 per cent amid stubborn higher inflation with a warning that the worst was yet to come. In its World Economic Outlook (WEO) 2023 – Countering the Cost-of-Living Crisis, the global lender of last resort forecast Pakistan’s GDP growth rate at 3.5pc and inflation at around 20pc with a disclaimer –- “the 2022 projections for Pakistan are based on information available as of the end of August and do not include the impact of the recent floods”. On the same basis, the fund projected Pakistan’s current account deficit at 2.5pc of GDP for the current fiscal year against 4.6pc of last year and the unemployment rate at 6.4pc. As such, all these estimates are based on outdated data that has seen sea-change over the past few weeks. The World Bank had last week projected Pakistan’s growth rate at 2pc and the Asian Development Bank put this at 3.5pc late last month.