Pakistan’s economy is again in trouble. While the new loan has passed from the IMF on one side, on the other hand the government has reduced the estimate of this year’s GDP growth. All this is happening when the situation on the border with India remains tense. In such a situation, Economic Experts believe that Pakistan’s economic situation may be even more crispy in the coming days.

GDP growth estimates reduced

Pakistan Bureau of Statistics announced on Tuesday that GDP growth in the current financial year is now expected to be 2.68 percent. Whereas earlier the government had set a target of 3.6 percent. This figure is only slightly better than last year’s 2.5 percent growth. This means that the condition of the economy did not improve.

IMF Terms and Global Recession

Bloomberg’s report states that this decline has come due to strict conditions of IMF and global economic lethargy. Both IMF and Asian Development Bank have cut Pakistan’s economic growth estimates. Between January and March 2024, the economy gained 2.4 percent, which is much less than the target.

Crisis on textile and agriculture sector

Pakistan’s economy is largely dependent on textile and agricultural exports. But under the new trade policy of America, a tariff of 29 percent has been imposed on many products, which has affected the trade balance of Pakistan.

Indo-Pak stress increased IMF concern

After the death of 26 people in the terrorist attack in Pahalgam, Kashmir on 22 April, the tension in Indo-Pak relations increased again. Due to this, the IMF also expressed concern about “Reputational Risk”.

In an IMF internal document (May 7), it was said that increasing stress between Indo-Pak could shock Pakistan’s economic reform schemes. The report said that if the IMF fund is misused or its fairness is questioned, then it can harm the credibility of the fund.

IMF passed a loan of $ 2.4 billion

Despite all these concerns, the IMF approved the loan of $ 2.4 billion to Pakistan in a meeting held in Washington on 9 May. But the condition is that Pakistan will have to implement strict economic reforms. In the coming time, the government of Prime Minister Shahbaz Sharif is going to present a new budget on June 2. In such a situation, it will be interesting to see how they create a balance between the terms of IMF, falling growth and regional tensions.

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