ISLAMABAD – Pakistan’s growth rate is set to hit an eight-year low, agovernment report predicted Friday, with all major indicators down as thecountry continues negotiating its 22nd bailout from the InternationalMonetary Fund.
A report by the National Accounts Committee, released late Thursday,forecast growth of a mere 3.3 percent in the current fiscal year against aprojected target of 6.2 percent.
“These are provisional data, not final, but Pakistan’s economy iswitnessing a slowdown,” Muzammil Aslam, an independent economist, said.
The report came as an IMF mission to Pakistan was expected to conclude itsvisit Friday, where it has been holding negotiations over a long-delayedbailout to stave off a potential balance-of-payments crisis.
A deal could be announced shortly, according to local media.
“We expect an IMF package similar to the one Pakistan obtained in 2008,”Aslam, who heads Emerging Economic Research, said.
Then, Pakistan got a $7.6 billion loan for five years to support itsprogramme to stabilise and rebuild the economy.
Analysts have warned that any fresh IMF deal could come with restrictionsthat would hobble Prime Minister Imran Khan’s grand promises to build anIslamic welfare state.
Discontent is already growing over the measures the government has taken tofend off the crisis, including devaluing the rupee by some 30 percent sinceJanuary 2018, sending inflation to five-year highs.
“I had to halve my blood pressure medicine dose as we can’t afford to buyexpensive medicines,” Shehla Samad, a 45-year housewife, told AFP inKarachi recently.
The IMF has issued an even more grim forecast for Pakistan, predictingeconomic growth of 2.9 percent — a 10-year low — for the current fiscalyear.
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Government officials said last month they have reached an “agreement inprinciple” with the IMF.
But Khan’s finance minister Asad Umar, who was leading negotiations, quitafter a cabinet reshuffle last month.
“We need to take some difficult decisions and we need to show somepatience…. Don’t expect that there will be miracles and rivers of honeyand milk,” Umar warned after his resignation.
The negotiations are now being led by Abdul Hafeez Sheikh, a former WorldBank official who was Pakistan’s finance minister from 2010-2013.
The US has warned that it will be watching closely to ensure Pakistan doesnot use IMF money to repay debts to China, which has poured billions intothe country for infrastructure projects under its Belt and Road Initiative.
Pakistan, which joined the IMF in 1950, has had 21 bailouts since then. Itsmost recent loan was issued in 2013, worth $6.6 billion.
The United Arab Emirates, Pakistan’s largest trading partner in the MiddleEast and a major investment source, recently offered $3 billion to supportthe battered economy.
Islamabad also secured $6 billion in funding from Saudi Arabia and struck a12-month deal for a cash lifeline during Khan’s visit to the kingdom inOctober. -APP/AFP
