Projections for Pakistan, IMF vs. World Bank
IMF has projected a GDP growth rate of 3.5% for 2023 against 6% in 2022, but it did not include the impact of the recent floods.
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The IMF World Economic Outlook (WEO) report for October 2022 titled “World Economic Outlook Countering the Cost-of-Living Crisis”, stated that the 2022 projections for Pakistan are based on information available till the end of August 2022 and do not include the impact of the recent floods.
According to the report, Pakistan would witness an increase in unemployment from 6.2% in 2022 to 6.4% in 2023 (even if the flood impact is ignored). On the other hand, the World Bank's report for October 2022 (Pakistan Development Update: Inflation and the Poor) which has taken into account the impact of floods in Pakistan has mentioned a preliminary estimate suggesting that as a direct consequence of the floods, the national poverty rate can increase by 2.5 to 4 percentage points, pushing an additional 5.8 to 9 million people into poverty during FY 2023.
According to World Bank's update inflation in Pakistan will remain high (around 23%) and the real GDP growth rate will be 2% while IMF's estimate is 15% for inflation and 3.5% for real GDP growth rate (probably because it hasn't taken into account the impact of floods).
GRAPHICS OF THE DAY
Inflation is expected to remain high during FY 23 (to some extent due to floods)
Real GDP growth rate would have slowed down during FY 23 compared to FY 22, but floods have further decreased the projected GDP growth rate
INSTAGRAM POST
SBP's forex reserves decreased by 3.8% week-on-week — www.instagram.com
⚫ The country's total foreign exchange reserves decreased to USD 13.2 billion, depicting a decrease of USD 342 million or 2.5% week-on-week mainly due to external debt and other payments
⚫ The country’s foreign exchange reserves are the lowest in three years
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TWEET
What Else We’re Reading
Pakistan’s Forex Reserves Drop to Lowest in Three Years (Bloomberg)
Bangladesh's high inflation eats up savings, squeezing banks (Nikkei Asia)
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