Pakistan Economic Forecast

Pakistan Economic Outlook

June 18, 2019

The economy remains on feeble footing. The rupee fell to record lows after the announcement of the IMF’s bailout package in May, which was accompanied by a push from the Fund for the Central Bank to adopt a more market-determined exchange rate. Moreover, merchandise exports contracted in March and April, while the latest data suggests the agricultural and industrial sectors continue to struggle. However, more positively, the current account deficit markedly improved in July 2018–April 2019. On the fiscal front, the government unveiled its FY 2020 budget on 11 June, which presented an ambitious revenue target, in an effort to shore up fiscal stability, while featuring other IMF-friendly policy adjustments, including the withdrawal of tax incentives for export sectors. The government also slashed its growth estimate for FY 2020 to the slowest rate since the global financial crisis.

Pakistan Economic Growth

Economic growth is projected to be lethargic in the fiscal year ending June 2020. A more austere fiscal stance and economic reforms to narrow gaping fiscal and current account deficits will likely hamper short-term growth prospects. Low international reserves, ballooning public debt and tensions with neighboring India present downside risks to the outlook. Our panelists see growth of 3.8% in FY 2020, which is down 0.1 percentage points from last month’s estimate, and 4.7% in FY 2021.

Pakistan Economy Data

Population (million)183186190194197
GDP per capita (USD)1,2671,3141,4261,4401,545
GDP (USD bn)231245271279305
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)2.62.515.87.510.0
Industrial Production (annual variation in %)
Unemployment Rate6.
Fiscal Balance (% of GDP)-8.0-5.5-5.3-4.6-5.8
Public Debt (% of GDP)62.662.761.865.565.1
Money (annual variation in %)16.912.612.814.513.9
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)9.0010.006.505.755.75
Exchange Rate (vs USD)105.4100.8104.9104.4110.7
Exchange Rate (vs USD, aop)101.5101.0102.8104.7105.3
Current Account (% of GDP)-1.1-1.3-1.0-1.7-4.1
Current Account Balance (USD bn)-2.5-3.1-2.8-4.9-12.6
Trade Balance (USD billion)-15.4-16.6-17.3-19.3-26.7
Exports (USD billion)24.825.
Imports (USD billion)40.241.741.441.348.7
Exports (annual variation in %)0.31.1-3.9-8.80.1
Imports (annual variation in %)-0.53.8-0.7-0.218.0
International Reserves (USD)8.511.816.020.918.7
External Debt (% of GDP)26.326.724.126.527.4

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Pakistan Facts

Bond Yield14.090.0 %Jul 11
Exchange Rate158.8-0.05 %Jul 11

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