World

ISLAMABAD: The Interna­tional Monetary Fund (IMF) has forecast Pakistan’s economy to grow by 3.2 per cent during the current fiscal year, falling short of the government’s budget target but surpassing projections by two other leading multilateral organisations. This growth rate is expected to be accompanied by a single-digit inflation rate of 9.5pc and a current account deficit nearing 1pc. In its World Economic Outlook (WEO-October 2024) released on Tuesday, the IMF also estimated global economic growth to stabilise at 3.2pc after “winning the battle against inflation”, despite ongoing risks related to regional conflicts, a slowdown in China, and the lasting effects of tight monetary policies and financial market volatility. The IMF, which recently approved a $7 billio...

Let’s start with the good news: it looks like the global battle against inflation has largely been won, even if price pressures persist in some countries. After peaking at 9.4 percent year-on-year in the third quarter of 2022, we now project headline inflation will fall to 3.5 percent by the end of next year, slightly below the average during the two decades before the pandemic. In most countries, inflation is now hovering close to central bank targets, paving the way for monetary easing across major central banks. The global economy remained unusually resilient throughout the disinflationary process. Growth is projected to hold steady at 3.2 percent in 2024 and 2025, but some low-income and developing economies have seen sizable downside growth revisions, often tied to intensifying co...