A setback for the Pakistani economy in 2021
The International Monetary Fund (IMF) has projected a rise in the unemployment ratio for Pakistan from 4.5 percent in 2020 to 5.1 percent in 2021.
The IMF World Economic Outlook (WEO) report “A long and difficult Ascent”, projected the GDP growth rate for Pakistan at 1 percent for 2021 against -0.4 percent in 2020.
The Fund has projected the inflation rate at 8.8 percent for 2021 against 10.7 percent in 2020. The current account balance is projected at negative 2.5 percent for 2021 compared to negative 1.1 percent for 2020.
The World Bank (WB) has projected Pakistan’s GDP growth rate 0.5 percent, inflation rate at 9 percent, and the current account balance at a negative 1.5 percent of GDP.
IMF further stated that remittance flows contracted sharply during the early lockdown period but have shown signs of recovery. Nonetheless, the risk of a decline in payments and transfers from migrant workers back to their home countries is very significant, particularly for such countries as Bangladesh, Egypt, Guatemala, Pakistan, the Philippines, and those in sub-Saharan Africa more broadly.
The International Monetary Fund turned slightly positive on the global economy for this year, but warned of a “long, uneven and uncertain” recovery.
The global economy is now projected to contract by 4.4% in 2020 — an upward revision from an estimate of -4.9% made in June (which has now also been revised to -5.2% due to a new methodology used by the IMF).
The IMF’s forecast assumes that social distancing due to the coronavirus pandemic will continue into 2021, and that local transmission will fall everywhere by the end of 2022.