KARACHI, Jan 13 (Express Tribune): A Pakistan-based research house has disagreed with the International Monetary Fund's (IMF) economic forecast, anticipating comparatively higher economic growth at 3 per cent and a lower current account deficit at $4 billion in the current fiscal year 2023-24.
In a commentary titled 'IMF First Review of SBA - GDP Growth, Inflation, Current Account estimates adjusted downwards', Topline Research's Senior Analyst Sunny Kumar said the IMF has revised its projected GDP growth from 2.5 per cent to 2 per cent for FY24. "We estimate Pakistan's GDP to clock in at around 3 per cent in FY24."
The IMF has also revised down its Current Account Deficit (CAD) forecast to 1.6 per cent of GDP ($5.7 billion) from an earlier projection of 1.8 per cent of GDP ($6.4 billion) for FY24. "We estimate CAD to clock in at 1.1 per cent of GDP ($4 billion) in FY24."
The global financial institution lending expects inflation to remain elevated. However, with appropriately tight policies, it could decline to 18.5 per cent (earlier 16.2 per cent) by the end of June 2024, with an average inflation rate of 24 per cent (earlier 26 per cent) for FY24.
The research house, however, projected an inflation reading lower than the global institution. "We expect inflation to be 17.5 per cent by the end of June 2024, with an average inflation rate of 23 per cent for FY24."
Taking cue from the projected downturn in the inflation reading, Kumar said the house anticipates a 700 basis points cut in the policy rate in 2024, reaching 15 per cent by December 2024 compared to the record high of 22 per cent since June 2023.
The IMF now expects gross reserves to be $9.1 billion by June 2024, up from the earlier estimate of $8.9 billion. "We anticipate reserves to be $8-10 billion by June 2024."
Pakistan research house sees higher growth
FE Team | Published: January 13, 2024 22:06:49
Pakistan research house sees higher growth
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