IMF raises Pakistan's GDP growth outlook
Global lender forecasts 4.7% GDP growth in 2015-16; low oil offers $4b cushion
Dubai — International Monetary Fund, or IMF, has raised GDP growth outlook for Pakistan to 4.7 per cent in financial year 2015-16 and said the country is expected to achieve 4.3 per cent year-on-year growth in current fiscal year ending on June 30.
Outgoing IMF mission head for Pakistan Jeffrey Franks said fund has scaled up its gross domestic product (GDP) growth forecast for Pakistan from 4.4 per cent to 4.7 per cent during July-June 2016 period as the country’s economy is in better shape after the implementations of economic reforms in the past 18 months.
“The sharp drop in oil prices represents an historic opportunity to reduce the vulnerability of the economy by building stronger fiscal and external buffers,” Franks told Khaleej Times on the sidelines of joint Press conference with Pakistan’s Finance Minister Ishaq Dar in Dubai on Thursday.
He said unexpected decline in oil prices gives $4 billion cushion to Pakistan economy and the government should utilise the advantage to address some of the long-standing imbalances in the energy sector.
“Some progress has been made in addressing the structural impediments to higher and more inclusive growth, but few important challenges remain and need to address for sustainable stable economy,” he said.
Elaborating, he said the government should take appropriate steps to enhance the independence of the central bank, resolve energy sector deficiencies on permanent basis, complete the legal framework for deposit insurance and privatise or restructure public enterprises.
Dar expressed the hope that Pakistan economy is on track to achieve its GDP growth target of 5.1 per cent during current financial year 2014-15 as all the major economic indicators are on positive trajectory.
“IMF always gave a cautious outlook, but we are confident of achieving our 5.1 per cent GDP growth target despite some challenges in the country,” Dar said.
To a question, he said Pakistan economy suffered significant losses due to sit-in protests and fall in oil prices, but the PML (N) government led by Prime Minister Nawaz Sharif managed to overcome the crises due to prudent economic policies, financial discipline and strict control on expenditures.
Dar also highlighted the economic reforms undertaken by the government since June 2013 and expressed his satisfaction over the performance of the economy.
“I assure you that Pakistan economy is moving in right direction and will achieve higher growth rates in future,” he said.
Governor of the State Bank of Pakistan Ashraf Wathra said the country has potential to register even higher growth rate in medium term.
“Pakistan has a proven history of achieving six per cent-plus growth in the past. We have to revive the economy and hit at least seven per cent GDP growth in coming years,” he said.
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