IMF expects Pak net borrowings at 8.4pc of GDP for FY2020

ISLAMABAD: The IMF has projected that Pakistan’s central government net borrowings will stand at 8.4 percent of Gross Domestic Product (GDP) during the current fiscal year 2020.

However, the Fund projected that the central government fiscal deficit would be standing at 7.4 percent of GDP for 2019-20 against 8.8 percent of GDP in the same period of the last financial year 2018-19. The IMF has projected that the government’s gross debt will be standing at 78.6 percent of GDP for 2020 against 76.6 percent for the last financial year. Total government’s net debt will be projected at 75.2 percent of GDP for FY2020 against 72.5 percent for the last financial year. Total gross external debt will be projected at 43.7 percent of GDP.

The IMF has given update in Regional Economic Outlook (REO) Middle East and Central Asia Department which comprised of 31 countries including Pakistan and showed that the Fund kept the GDP growth projection unchanged at 2.4 percent of GDP for the current fiscal year despite insistence from Pakistani side that the improved performance of agriculture sector would result into crossing overall GDP growth rate of 3 percent in the ongoing fiscal year. The IMF has projected that the CPI based inflation on average would be standing at 13 percent in the current fiscal while core inflation would be standing at 12.4 percent for FY2020. The broad money growth is projected at 12.1 percent in FY2020 against 10.7 percent in the corresponding period of last fiscal year, indicating that the money supply would continuously put pressures on the economy.

Total general government revenue is estimated to go up to 16.1 percent of GDP in 2020 against 12.9 percent for the last financial year. The government’s general expenditures and net lending will be estimated at around 23.6 percent of GDP for FY2020 against 21.6 percent for the last financial year. The IMF has estimated that Pakistan’s exports of goods and services would go up to $32 billion in current fiscal year 2020 but its projection for last fiscal year to the tune of $30 billion could not be materialized. The imports are projected at $59.5 billion for the current fiscal year 2020.

The current account deficit is projected to decline further and will be standing at negative 2.6 percent of GDP for FY2020 against 4.6 percent for the last financial year. Pakistan’s gross official reserves are projected to stand at $11.1 billion for current FY2020 against $6.8 billion for the last financial year. The gross official reserves will be standing at 2.2 months of imports.