IMF downgrades Pakistan's growth forecast for 2024: Report

The International Monetary Fund (IMF) has revised down Pakistan's growth estimate for fiscal year 2024 to two per cent, marking a 0.5 per cent reduction from October's projection of 2.5 per cent, AFP reported.

The World Economic Outlook (WEO) report for January highlighted challenges facing Pakistan's economy, with the IMF estimate falling below the government's target of 3.5 per cent GDP growth for the current year.

In contrast, the IMF raised its global growth forecast to 3.1 per cent for 2024, citing unexpected resilience in major economies worldwide, including the United States and China.

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AFP cited IMF Chief Economist Pierre-Olivier Gourinchas, who noted, "The global economy continues to display remarkable resilience, with inflation declining steadily and growth holding up."

Economists express concerns about Pakistan's economic trajectory, emphasising the need for targeted reforms to stimulate growth. The downgraded growth estimate signals a challenging environment for the country, requiring proactive measures to address structural issues and boost economic prospects.

The IMF's revised projection is indicative of the multifaceted challenges Pakistan faces, including inflation, energy prices, and weakened foreign demand. Experts stress the importance of policy interventions to navigate these challenges and foster a more robust economic landscape.

While Pakistan faces economic headwinds, the global economic outlook appears more optimistic, with the IMF upgrading its 2024 global growth forecast to 3.1 per cent. Despite acknowledging the remarkable resilience of the global economy, Gourinchas highlighted the persistence of risks and challenges.

Policymakers worldwide continue to grapple with the impact of elevated interest rates, the withdrawal of pandemic-related government support, and consistently low levels of productivity. The IMF predicts that global growth will remain below its recent historical average, indicating a cautious approach toward the ongoing complexities of the global economic landscape.

The United States and China, the world's two largest economies, received significant upgrades to their growth outlook for 2024. The IMF now expects the US economy to grow by 2.1 per cent, down slightly from an estimated 2.5 per cent in 2023.

In contrast, China's economy is on track to achieve 4.6 per cent growth, reflecting carryover from stronger-than-expected growth in 2023 and increased government spending on capacity building. India continues to shine as a bright spot in the global economy, with a growth estimate of 6.5 per cent for 2024.

Despite ongoing challenges in Europe, Asia remains buoyant, contributing to an overall positive growth outlook for many countries in 2024.

(With inputs from AFP)