Pakistan Economic Outlook
May 21, 2019The economy was thrown a lifeline on 12 May when the government reached an agreement with the IMF to unlock a three-year, USD 6 billion loan package which will be vital to shoring up the country’s critically-low foreign reserves. The agreement comes with strict conditionality, and led the rupee to hit an all-time low against the dollar. The Fund’s prescriptions center on improving the state’s tax collection capacity, recouping costs in the energy sector and in state-owned enterprises—all in a bid to improve the fiscal position—and eventually transitioning the foreign exchange regime to a more free-floating system. As a result of full implementation of the IMF package, there should be a narrowing of the current account deficit, which remains gaping despite a marked improvement in July 2018-March 2019.
Pakistan Economic GrowthThe economy is seen remaining in the doldrums in FY 2020 as economic reforms agreed to as part of the IMF deal will likely inflict short-term pain. Notably, efforts to rein in the fiscal and current account deficits and the high level of public debt will likely weigh on the growth momentum in the short-term, while strained relations with India represent another downside risk. Our panelists see growth of 3.9% in FY 2020, which is down 0.1 percentage points from last month’s estimate, and 4.7% in FY 2021.
Pakistan Economy Data
5 years of Pakistan economic forecasts for more than 30 economic indicators.
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|Bond Yield||14.14||0.0 %||Jun 13|
|Exchange Rate||153.1||-0.05 %||Jun 13|
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