International Monetary Fund released the World Economic Outlook (WEO) report called “A long and difficult ascent” on Tuesday that revealed that the Pakistan’s economy could grow by only 1%, Inflation may cross above 10% and rate of Unemployment will further jump by the end of this fiscal year.
The report also revealed that the advanced economies were recovering from the adverse effects of the Great Lockdown faster than earlier projected.
Pakistan’s economy, which in the last fiscal year contracted by 0.4%, is projected to grow by 1% in this fiscal year 2020-21, the WEO report said.
The 1% growth rate is less than half of the official target of 2.1% and broadly in line with the projections made by the World Bank.
The WEO noted that inflation in Pakistan could be 10.2% on an annualised basis, which by 2025 is expected to remain around 8.6% and the unemployment rate, which till this fiscal year was 4.5% may further jump to 5.1%.
The IMF projected over 13.3% increase in unemployment in Pakistan within a year.
The IMF report projections suggest that Pakistan is in stagflation – a condition in which the economic growth rate is slow while unemployment and prices of goods and services are high.
The pace of inflation is skyrocketing at a time when the economic activity, both in the formal as well as informal sectors, is slowing down, which has made it difficult for the people to cope with the situation.