International Monetary Fund (IMF) has predicted that the inflation rate in Pakistan would increase to almost 20 percent because of the weakening economic condition of the country.
IMF has also forecasted the foreign exchange reserves of Pakistan to increase to $16.2 billion which would be sufficient for only two months and three weeks of imports against previously expected foreign exchange reserves increasing to $20.7 billion.
According to a media report, IMF has projected the inflation rate at 19.9 percent revising its previous assessment of the inflation rate at 7.8 percent. The IMF held its last review talks in 2021 but the report had been finalized in January and within six months duration, the global lender has drastically revised its inflation forecast.
IMF has revised its projections for the ongoing financial year compared with its previous assessment at the time of the last review; media reports have stated quoting Finance Ministry officials.
Pakistan’s economic growth for the previous year has been forecasted by one percent to 3.5 percent along with a major adjustment in the inflation rate. These revised projections would be presented at the IMF executive board meeting scheduled on August 29.
According to media reports, Pakistan’s request for early release of the $1.2 billion loan tranche under the seventh and eighth review would be considered in the board meeting and after the board’s approval, medium-term macroeconomic framework projections would be released.
State Bank of Pakistan (SBP) had maintained the expected growth rate at three percent to four percent despite devastations due to floods hitting the agriculture sector heavily. The government had set the growth rate target at five percent.