IMF Confirms Pakistan 2.7% Growth, Projects 3.6% Below Government Target

The International Monetary Fund (IMF) has confirmed Pakistan's economic growth rate at 2.7 percent for the last fiscal year, aligning with the government's figures but falling short of the 3.6 percent target. For the current fiscal year, the IMF projects a growth rate of 3.6 percent, which remains below the government's target of 4.2 percent. The IMF cites a combination of domestic challenges and global risks, including geopolitical tensions, trade barriers, and economic policy uncertainties, as factors limiting Pakistan's growth potential despite some improvements such as reduced inflation and a narrowing current account deficit. While Pakistan's projected growth outpaces the global average, the IMF emphasizes the need for regaining investor confidence, stabilizing financial policies, and continuing structural reforms to sustain growth. Additionally, concerns were raised by international diplomats about Pakistan's rising external debt servicing costs and the sustainability of energy sector reforms, which involve addressing a significant circular debt through commercial loans and tariff adjustments. The IMF recommends that Pakistan and other emerging economies focus on rebuilding fiscal buffers, ensuring financial resilience, and adopting inclusive economic policies amid ongoing global uncertainties.