IMF sees Pakistan’s GDP soaring to 4.5% by FY28

October 11, 2024 (MLN): The International Monetary Fund (IMF) projected Pakistan’s real GDP growth to gradually recover, reaching 4.5% by FY28, according to the latest Staff Report published by IMF. 

The forecast hinges on strong policy implementation and timely external financing, as the country moves from stabilization to recovery.

The IMF expects tight fiscal and monetary measures to help Pakistan maintain recent disinflation trends, with inflation returning to the State Bank’s 5–7% target range by FY26.

About fiscal consolidation, the report said, the FY25 budget targets an underlying primary surplus of 1% of GDP, bolstered by permanent tax measures and efforts to improve revenue collection.

The primary surplus will gradually increase to 2% by the end of the program (from 0.4% in the 2nd review of the SBA), underpinned by a net 3pp increase in the tax-to-GDP ratio, which will strengthen debt sustainability while creating room for increased priority social and development spending.

The projections provided by the IMF are based on Pakistan's economic recovery, which is contingent on strong policy implementation and timely external financing to transition the economy from stabilization to growth.

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