IMF predicts gradual recovery for Pakistan's economy in 2024

Pakistan's economy is poised for a gradual recovery in 2024, according to a recent report by the International Monetary Fund (IMF). The country experienced a recession in 2023, but the IMF predicts a positive turnaround in the coming years. The World Economic Outlook report, titled 'Steady but slow: Resilience amid divergence,' highlights the global economic landscape and forecasts a steady growth rate for the world economy.

In 2023, Pakistan's GDP was in a recessionary state at -0.2%, but the IMF projects a significant improvement to 2.0% in 2024. Despite falling short of the government's target of 3.5% growth for the fiscal year 2023-24, the economy is expected to strengthen further to 3.5% in 2025 and reach 5.0% by 2029, albeit at a slower pace.

Inflation, a major concern for Pakistan, is expected to decrease from 29.2% in 2023 to 24.8% in 2024 and further to 12.7% by 2025. This reduction signifies a positive trend towards economic stability. Unemployment rates are also projected to decline from 8.5% in 2023 to 7.5% in 2025, indicating potential job market improvements.

However, Pakistan faces challenges in its current account deficit, which is expected to worsen from -0.7 in 2023 to -1.2 in 2025. The country's status as a net oil importer contributes to this deficit, posing a significant economic challenge for Islamabad to address in the coming years.

The IMF report paints a cautiously optimistic picture of Pakistan's economic prospects, with gradual improvements expected in GDP growth, inflation rates, and unemployment figures. While challenges remain, the projected trajectory indicates a path towards economic resilience and stability for Pakistan in the years ahead.