Tuesday, 19 October 2021

Pakistan growth to hit eight-year low as IMF bailout looms

Pedestrians walk past the International Monetary Fund headquarters' complex in Washington Sunday, May 2, 2010. A senior International Monetary Fund official says the IMF's executive board is meeting in Washington to consider how much aid to grant Athens under a massive rescue loan package.
(AP Photo/Cliff Owen)

KARACHI: Pakistan’s growth rate is set to hit an eight-year low, a government report predicted Friday, with all major indicators down as the country continues negotiating its 22nd bailout from the International Monetary Fund.

A report by the National Accounts Committee, released late Thursday, forecast growth of a mere 3.3 percent in the current fiscal year against a projected target of 6.2 percent.

“These are provisional data, not final, but Pakistan’s economy is witnessing a slowdown,” Muzammil Aslam, an independent economist, said.

The report came as an IMF mission to Pakistan was expected to conclude its visit Friday, where it has been holding negotiations over a long-delayed bailout to stave off a potential balance-of-payments crisis.

A deal could be announced shortly, according to local media.

“We expect an IMF package similar to the one Pakistan obtained in 2008,” Aslam, who heads Emerging Economic Research, said.

Then, Pakistan got a $7.6 billion loan for five years to support its programme to stabilise and rebuild the economy.

Analysts have warned that any fresh IMF deal could come with restrictions that would hobble Prime Minister Imran Khan’s grand promises to build an Islamic welfare state.

Discontent is already growing over the measures the government has taken to fend off the crisis, including devaluing the rupee by some 30 percent since January 2018, sending inflation to five-year highs.

“I had to halve my blood pressure medicine dose as we can’t afford to buy expensive medicines,” Shehla Samad, a 45-year housewife, told AFP in Karachi recently.

The IMF has issued an even more grim forecast for Pakistan, predicting economic growth of 2.9 percent – a 10-year low – for the current fiscal year.

Government officials said last month they have reached an “agreement in principle” with the IMF.

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