The recently released International Monetary Fund (IMF) report on Pakistan’s economy projects a persistent challenge of high inflation, anticipating a national rate of 18.5% and a more severe 25.9% in rural areas.
External payments pressure on Pakistan, highlighted in the report, is expected to endure for several years.
According to the IMF, the current account deficit is slated to persist at 1.6% of the economy. Emphasizing that delayed funding from financial institutions may adversely impact the economy. Potentially leading to currency depreciation and higher costs for food and beverages in the global market.
The report reveals a freeze on salary increases for government employees and pensioners until June. Accompanied by a significant cut of 61 billion rupees in the development budget.
The IMF emphasizes the timely issuance of notifications by regulatory bodies like the (NEPRA) and (OGRA) for power tariff and gas rate adjustments, respectively.
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Highlighting Pakistan’s substantial financing needs, the IMF outlines a requirement of $71.88 billion in external financing over the next three years. With $24.96 billion needed in the current financial year alone.
The report signals growing debt concerns, deeming the current level unsustainable. Underscores the necessity for substantial financing from international financial institutions and various countries.
Despite the challenging scenario. The IMF notes that the Government of Pakistan has assured them of external financing arrangements.
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