Unemployment in Pakistan to shoot up by 6.4, inflation likely to increase: IMF Report
Oct 13, 2022
Islamabad [Pakistan], October 13 : Inflation in Pakistan is expected to reach around 20 per cent in FY23, the International Monetary Fund (IMF) stated in its latest report and added that stubborn higher inflation would likely be seen in the south-Asian country, Dawn reported.
The report forecasted that a high inflation rate would directly affect the unemployment rates in Pakistan as they will also increase.
In its World Economic Outlook (WEO) 2023 - Countering the Cost-of-Living Crisis, the global lender of last resort forecasted Pakistan's GDP growth rate at 3.5 per cent and inflation at around 20 per cent with a disclaimer-- "the 2022 projections for Pakistan are based on information available as of the end of August and do not include the impact of the recent floods".
The IMF has come out with its economic assessment report giving estimates and projections for 2023.
The IMF said its forecast project global growth to slow from 6 pc in 2021 to 3.2 pc in 2022 and go further down to "2.7pc in 2023 - 0.2 percentage points lower than the July forecast - with a 25pc probability that it could fall below 2pc", according to Dawn.
However, the International Monetary Fund (IMF) has lowered India's GDP growth forecast by 60 basis points to 6.8 per cent for the current year as India would maintain its position as the fastest-growing major economy in the world.
In its latest World Economic Outlook report, the IMF noted, "The outlook for India is for growth of 6.8 per cent in 2022, a 0.6 percentage point downgrade since the July forecast, reflecting a weaker-than-expected outturn in the second quarter (April-June) and more subdued external demand."
Policymakers should focus on restoring price stability and alleviating cost-of-living pressures. The IMF said that multilateral cooperation remains necessary to fast-track the green energy transition and prevent fragmentation.
On inflation, the IMF said, "global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades."
Global inflation is forecast to rise from 4.7 per cent in 2021 to 8.8 per cent in 2022 but to decline to 6.5 per cent in 2023 and to 4.1 per cent by 2024. Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy.
