IMF and Pakistan to Revise GDP Target After Flood Impact

🇵🇰 IMF and Pakistan to Lower GDP Target After Floods

The International Monetary Fund (IMF) and the Government of Pakistan are planning to revise the country’s GDP growth target for the current financial year. The new target is expected to drop to 3.5%, mainly because of the damaging floods and external economic pressures affecting the nation.

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📊 Original Growth Target May Not Be Achieved

The government had earlier aimed for a 4.2% GDP growth, but recent economic conditions have made it difficult to reach that goal. The IMF has also predicted that Pakistan’s economy may grow only 3.6% next year, which is lower than the government’s expectations.

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🌧️ Floods Cause Major Economic Damage

According to officials, the recent floods have seriously impacted agriculture, livestock, and infrastructure, slowing down the country’s recovery process. These challenges are now part of ongoing talks between the IMF and Pakistani authorities in Islamabad.

The meetings are part of the IMF’s review mission, which will also decide the release of the next loan installment under the Extended Fund Facility (EFF).

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💰 Inflation, Trade Deficit, and Reserves Outlook

Inflation is expected to stay between 7% and 8% this year, while foreign exchange reserves could reach around $14.5 billion.

Pakistan’s current account deficit is estimated at $1.5 billion.

Exports are forecast to reach $33 billion, while imports are likely to touch $60 billion, resulting in a trade deficit of $27 billion. Meanwhile, remittances from overseas Pakistanis are expected to increase to $36 billion.

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🏛️ Constructive Talks Continue

Officials from both sides described the discussions as “constructive and positive.”

Talks are focused on tax measures, structural reforms, and external financing plans.

The IMF emphasized that the timely implementation of agreed economic reforms will be crucial for Pakistan to receive future loan disbursements.

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🌱 Economic Reforms Still the Key

Experts believe that despite the challenges, economic reforms can help stabilize the economy in the long run. The IMF and Pakistan are expected to continue negotiations in the coming days to finalize the next steps.