Navigating fragility

PAKISTAN remains caught between cautious economic optimism and persistent challenges. This is the central message of the IMF’s latest assessment of the country’s outlook for the current fiscal year and its medium-term growth trajectory. The Fund’s new World Economic Outlook report projects Pakistan’s GDP to grow by a modest 3.6pc, with average headline inflation rising slightly to 6pc from 4.5pc last year, and the current account balance shifting from a 0.5pc surplus to a manageable 0.4pc deficit — twice the finance ministry’s estimate of 0.2pc of GDP. These projections, issued days after the IMF completed its two-week review of the economy this month, appear fairly optimistic, given that they do not account for the economic impact of the recent devastating floods. A revision of the Fund’s outlook, therefore, cannot be ruled out once flood loss estimates are finalised.