WASHINGTON: IMF has predicted that Pakistan’s economy would commence turning around and growth rate would pick-up after 2020.
According to IMF Pakistan’s primary deficit will turn positive one per cent of GDP in the FY21 from a negative 0.5pc in FY20. However, IMF warned that country’s debt levels would remain elevated at above 65.4pc until FY24. that the government expenditure would generally remain above 22pc. In 2019 budget deficit will be 8.8pc of the GDP but with the aid of IMF supported programs in the FY20 it will be 7.4pc. The fiscal deficit is likely to go down to 5.4pc of GDP in FY21, followed by 3.9pc in FY22 and 2.8pc in FY23. It will then stay at 2.6pc of GDP in FY24, adds the report.
IMF held that the primary balance would be negative 0.5pc of GDP in FY20 and then turn surplus to the extent of 1pc of GDP in FY21. The primary balance would further improve to 2.1pc of GDP in FY22 followed by 2.7pc of GDP over next couple of years. According to IMF revenue-to-GDP ratio, presently at 12.8pc, is expected to increase to 16.3pc of GDP and due to taxation measures taken during FY 2019 would go up to 17.9pc in FY21. IMF claims that the ratio would increase to 19pc in FY22 and then remain stagnant at 19.6pc in FY23 and FY24.
IMF maintained that the government expenditure would keep moving within a narrow band of 22-23pc of GDP all along until FY24.
The general government debt at 76.7pc of GDP in FY19 will further go up to 78.6pc in FY20 and come down to 76.1pc of GDP in FY21. The debt-to-GDP ratio will further reduce to 72.5pc in FY22 followed by 69pc in FY23 and 65.4pc in FY24. IMF has advised policymakers to follow prudent fiscal policies, anchored by a medium-term framework.
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