ISLAMABAD: Another bad news for those already suffering is that the International Monetary Fund (IMF) has said that inflation will not fall until the end of the current financial year.
According to the International Monetary Fund’s Regional Economic Outlook report, inflation in Pakistan will remain above 11% by the end of the current fiscal year, while the country’s economic growth is expected to be 4% this year, compared to the previous fiscal year’s growth rate was 5.6%. Previous year.
The report further said that this year’s inflation rate of 11.1% will be 3.4% higher than the October 2021 forecast, and global food and energy prices have been cited as the main causes of inflation.
Pakistan s current account deficit ballooned to US$13.2 billion in the nine months of its fiscal year from a gap of US$275 million a year earlier on the back of soaring oil import costs, official data showed.
Rating agency Moody s expects the deficit to widen to 5-6per cent of gross domestic product in the current fiscal year ending June 30, up from its earlier 4per cent projection, putting greater pressure on Pakistan s foreign reserves.
Jihad Azour, director of IMF s Middle East and Central Asia Department, told Reuters the fund s team will assess the policy priorities of the new government and the economic impact in the context of the war in Ukraine.
“But of course, we have been over the last few months highlighting the importance of maintaining the current account situation under control… reduce the current account deficit.”
He did not elaborate on the policy actions, but the IMF has said earlier a continued commitment to a market-determined exchange rate and a prudent macroeconomic policy mix will help reduce the deficit.