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IMF Forecasts Pakistan’s GDP Growth Rate at 1.5% for 2021

The International Monetary Fund (IMF) has estimated Pakistan’s GDP growth rate at 1.5 percent for 2021 against a negative 0.4 percent in 2020.

It is worth recalling that last month, Pakistan’s central bank increased its growth objective to approximately 3 percent, from slightly above 2 percent for the current year.

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The Fund has also projected a reduction in inflation from 10.7 percent in 2020 to 8.7 percent in 2021, which is projected to decline to 8 percent in 2022. The current account balance is estimated at -1.5 percent of GDP for 2021 against -1.1 percent in 2020, and -1.8 percent is projected for 2022.

The research observed that one year into the COVID-19 pandemic, the rising human toll continues to raise concerns, even as growing vaccine coverage raises attitude. After an estimated decline of –3.3 percent in 2020, the global economy is projected to grow at 6 percent in 2021, moderating to 4.4 percent in 2022.

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The IMF report stated that future developments will depend on the path of the health crisis, including whether the new COVID-19 strains prove susceptible to vaccines or they prolong the pandemic; the effectiveness of policy actions to limit persistent economic damage (scarring); the evolution of financial conditions and commodity prices; and the adjustment capacity of the economy.

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