January 06, 2024 (MLN): Pakistan is projected to experience modest economic growth of 2% in 2024, while its inflation rate is expected to decrease to 19.1%, as per the latest United Nations (UN) report released on Friday.
The UN additionally forecasts an improvement in economic growth to 2.4% in 2025 and a further decrease in the inflation rate to 10.4% in the same year.
The UN released its annual report titled ‘World Economic Situation and Prospects (WESP) 2024’, presenting its projections for the global economic landscape.
In June 2023, Pakistan entered into a Stand-by Arrangement with the IMF worth $3 billion.
The IMF program is expected to help stabilize the economy, increase the country’s foreign exchange reserves, and facilitate fiscal adjustment while also protecting crucial social spending, the report reads.
In the near term, governments in the region will likely continue to pursue fiscal consolidation to improve debt sustainability.
Achieving this goal will be challenging, however, and will hinge on boosting revenue mobilization, enhancing spending efficiency, and continuing to make progress on structural reforms.
The report notes that tight financial conditions and fiscal & external imbalances will continue to weigh on growth in South Asia in the near term.
In addition, geopolitical tensions – including the ongoing war in Ukraine and the conflict in Western Asia – will expose net-oil-importing countries, like Pakistan, to the risk of sudden oil price spikes.
The report highlights that climate-change-related events continued to have an adverse impact on the region in 2023.
Droughts intensified considerably during July and August, affecting most of India, Nepal and Bangladesh, while Pakistan recorded above-average rainfall," it reads.
