Business

IMF projects Pakistan’s GDP growth to stand at 2.5% in current fiscal year

Published

10 months ago

Farwa

IMF says stagflation and high unemployment rate to persist.
Data shows unemployment rate increased in last two fiscals.
IMF projects that GDP growth rate may rise to 5% by FY2028.

ISLAMABAD: The International Monetary Fund (IMF) has warned that stagflation in the country would persist and also lowered the GDP growth projection for the current fiscal year 2023-24, reported The News Monday.

The global lender, in its World Economic Outlook for 2023-24, estimated that the GDP growth rate of Pakistan would stand at 2.5% for the current fiscal compared to the government’s 3.5% target.

Apart from the stagflation, the IMF has also warned that the unemployment rate will remain elevated at 8% in FY2024 against 8.5% in FY2023. The unemployment rate stood at 6.2% in FY2022. The IMF’s data shows that the unemployment rate has increased in the last two fiscals.

The report also projected that the GDP growth rate turned into -0.5% in the last financial year 2022-23 under the PDM-led regime but then the government gave a provisional growth rate of 0.29% for the previous fiscal year. The IMF has projected that the country’s GDP growth rate might rise to 5% by FY2028.

Under the IMF programme, the caretaker government will release the quarterly GDP growth figures under the $3 billion Stand-By Agreement (SBA) by the end of next month, so the finalised GDP growth figure would be turned into negative for the last financial year.

However, the CPI-based inflation-related projection would be elevated and estimated at 23.6% against the government’s projection of 21.9% for the ongoing financial year.

A low growth rate paired up with higher inflation leads to stagflation which would in turn increase poverty and unemployment, raising fears that the vulnerable segments of society might plunge into the trap of severe poverty.

The CPI-based inflation was lowered by the IMF’s World Economic Outlook; it is projected at 23.6% for the current fiscal against an earlier projection of 25.9% by the IMF staff in a report released last July.

The most worrying indicators for Pakistan’s economy will be related to the persistence of the current account deficit in the range of -1.8% of GDP for the current financial year 2023-24 against -0.7% of GDP in financial year 2022-23.

World economy resilient to shocks but ‘limping’

Meanwhile, IMF kept its 2023 global growth forecast unchanged on Tuesday but warned that the economy is “limping along” as inflation remains high and the outlooks for China and Germany were downgraded.

The IMF’s updated World Economic Outlook still sees growth of 3.0% for this year but it cut its forecast for 2024 to 2.9%, down 0.1 percentage points from its July report.

“The economy continues to recover from the pandemic and Russia’s invasion of Ukraine, showing remarkable resilience,” said the IMF’s chief economist, Pierre-Olivier Gourinchas.

“Yet growth remains slow and uneven. The global economy is limping along, not sprinting,” he said at a news conference during the institution´s annual meetings in Marrakesh, Morocco.

Inflation, which has fallen sharply since last year, is predicted to remain elevated at 6.9% this year, up slightly from July, and 5.8% in 2024, up 0.6 percentage points. Central banks have raised interest rates sharply in efforts to contain inflation.

The move could have knock-on effects on growth, but the IMF warned central banks against easing the monetary tightening too soon, adding that it still expects the global economy to have a “soft landing” — a slowdown that avoids recession.

“The news on inflation is encouraging, but we’re not quite there yet,” Gourinchas said.

Business

An investigation was “launched” into PTA’s inability to get Rs. 78 billion back from Telcos

Published

1 day ago

Farwa

The PTA has reportedly been instructed to reply to NAB by July 29. According to the enquiry, the national exchequer has suffered losses as a result of the delay in collecting dues.

The PTA has been asked to provide NAB with information about any pertinent records, court proceedings, and overdue bills. The NAB Karachi has summoned the PTA officials to appear with all pertinent documentation.

All of the principle sum has to be paid by the LDI firms, according to sources. But due to judicial stay orders, the collection of dues has been impeded.

These sources further state that a steering group has been established by the Ministry of IT to supervise the issue of dues recovery.

In a previous event, the tariffs levied on importing cell phones from outside were clarified by the Pakistan Telecommunication Authority (PTA).

Contrary to what some internet reports claim, PTA clarified in response to recent news regarding the tariffs on mobile phone imports that there hasn’t been a formal decision to remove these levies in Pakistan.

the PTA.Pakistanis living abroad will be the only ones free from these levies, according to the PTA. A SIM card can be inserted and the phone restarted to temporarily register a device for non-PTA mobile subscribers.

Business

Weekly inflation in Pakistan increased by 0.17 percent.

Published

1 day ago

Farwa

The SPI for the week under review in the aforementioned group was reported at 321.95 points, as opposed to 321.40 points during the previous week, according to the PBS statistics.

The SPI for the combined consumption group saw a 20.09 percent increase in the week under review compared to the same week the previous year.

The weekly SPI includes 51 necessary items for every spending group and 17 urban areas, with a base year of 2015–16 = 100.

The SPI for the lowest consumption category, which is up to Rs 17,732, grew by 0.08 percent from 311.97 points to 312.22 points this past week.

0.18 percent,The index of consumption for the lowest consumption groups, which are Rs 17,732-22,888, Rs 22,889-29,517, Rs 29,518-44,175 and above Rs 44,175; increased by 0.13 percent, 0.15 percent, 0.18 and 0.19 percent, respectively.

Nineteen (37.25%) of the fifty-one commodities had price increases over the week, eight (15.69%) had price decreases, and twenty-four (47.06%) had unchanged pricing.

On a weekly basis, the following commodities saw significant price decreases: tomatoes (9.19%), onions (2.14%), LPG (1.04%), bananas (0.53%), wheat flour (0.35%), potatoes (0.17%), pulse masoor (0.16%), and bread (0.05%).

Chicken (4.80%), garlic (2.01%), pulse gramme (1.87%), eggs (1.71%), beef (0.93%), gur (0.89%), pulse moong (0.84%), fresh milk (0.45%), firewood (0.23%), and cigarettes (0.12%) were among the items whose average prices increased significantly week over week.

The commodities that saw a year-over-year decline were: wheat flour (31.75%); cooking oil (13.44%); vegetable ghee 2.5 kg (10.42%); vegetable ghee 1 kg (9.85%); mustard oil (8.33%); eggs (5.82%); rice basmati broken (4.15%); and tea package (2.52%).

Gas prices for Q1 (570.00%), onions (96.01%), pulse gramme (40.39%), powered milk (39.11%), garlic (34.61%), pulse moong (29.77%), men’s sandals (25.01%), beef (23.52%), salt powder (23.28%), pulse mash (22.50%), and energy saver (17.96%) were among the commodities whose average prices increased year over year.

Business

The price of gold has drastically dropped in Pakistan.

Published

2 days ago

Farwa

As per the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the cost of 24-karat gold per tola decreased by Rs 2,300, standing at Rs 250,500.

A kilogramme of 24-karat gold costing Rs1,972 less at the local market, making it worth Rs2114,763. Ten grammes of 22-karat gold had a price decrease to Rs196,866 as well.

After losing a significant $43 during the day, the rate per ounce of gold on the international market also decreased. It currently stands at $2,370.

On Thursday, the price of 24-karat silver also experienced a decline, falling by Rs60 to settle at Rs2,860 petal.