Pakistan has informed the International Monetary Fund (IMF) that import restrictions and other measures are expected to keep the current account deficit below Rs 4.5 billion, thus alleviating external financing challenges. During a briefing to the IMF, it was conveyed that economic growth for the current fiscal year is anticipated to be between 3 to 3.5 percent, with an inflation rate of 21 percent. For the following fiscal year, an inflation rate of 7 to 8 percent is envisaged.
In the context of negotiations for a $3 billion standby arrangement, Pakistan’s Ministry of Finance informed the IMF that the current account deficit is likely to decrease by $2 billion. This projection is based on an assumed accommodation of $9.6 billion, which increased by 0.7 percent during the first four months of the year.
Initially, the government had estimated imports of $54 billion for the current fiscal year, but this figure has been revised downward by $10.4 billion. Import figures for the first four months stood at $17 billion, marking an 18.5 percent decrease compared to the previous year.
It is hoped that remittances will exceed $30 billion in the fiscal year, and a decrease in imports will reduce reliance on external financing. However, it may also have a negative impact on the Federal Board of Revenue’s tax collections. Ongoing negotiations with the IMF primarily focus on external financing and high-interest payments. The IMF is expected to release its review in the coming days.
