Pakistan Economic Forecast

Pakistan Economic Outlook

May 21, 2019

The economy was thrown a lifeline on 12 May when the government reached an agreement with the IMF to unlock a three-year, USD 6 billion loan package which will be vital to shoring up the country’s critically-low foreign reserves. The agreement comes with strict conditionality, and led the rupee to hit an all-time low against the dollar. The Fund’s prescriptions center on improving the state’s tax collection capacity, recouping costs in the energy sector and in state-owned enterprises—all in a bid to improve the fiscal position—and eventually transitioning the foreign exchange regime to a more free-floating system. As a result of full implementation of the IMF package, there should be a narrowing of the current account deficit, which remains gaping despite a marked improvement in July 2018-March 2019.

Pakistan Economic Growth

The economy is seen remaining in the doldrums in FY 2020 as economic reforms agreed to as part of the IMF deal will likely inflict short-term pain. Notably, efforts to rein in the fiscal and current account deficits and the high level of public debt will likely weigh on the growth momentum in the short-term, while strained relations with India represent another downside risk. Our panelists see growth of 3.9% in FY 2020, which is down 0.1 percentage points from last month’s estimate, and 4.7% in FY 2021.

Pakistan Economy Data

Population (million)183186190194197
GDP per capita (USD)1,2671,3141,4281,4661,547
GDP (USD bn)231245271284305
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)2.62.515.87.511.0
Industrial Production (annual variation in %)
Unemployment Rate6.  
Fiscal Balance (% of GDP)-8.2-5.5-5.3-4.6-5.8
Public Debt (% of GDP)62.662.761.865.565.0
Money (annual variation in %)16.912.612.814.513.9
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)9.0011.006.505.755.75
Exchange Rate (vs USD)99.698.68111.9114.7114.9
Exchange Rate (vs USD, aop)96.82112.9111.4114.3114.8
Current Account (% of GDP)-1.1-1.3-1.0-1.7-4.0
Current Account Balance (USD bn)-2.5-3.1-2.8-4.9-12.1
Trade Balance (USD billion)-15.4-16.6-17.2-18.4-26.7
Exports (USD billion)24.825.
Imports (USD billion)11.241.741.311.448.7
Exports (annual variation in %)0.31.1-3.9-8.80.1
Imports (annual variation in %)-0.53.8-0.9-2.320.6
International Reserves (USD)8.511.816.020.918.7
External Debt (% of GDP)25.025.322.724.526.2

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Pakistan Facts

Bond Yield14.140.0 %Jun 13
Exchange Rate153.1-0.05 %Jun 13

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