ISLAMABAD: The International Monitory Fund (IMF) projected that Pakistani economy will grow by 4 percent during the current fiscal year, which will expand to 6 percent within the next five years.
The Fund released “World Economic Outlook” report on Thursday in Washington. The report said the growth of Pakistani economy (GDP) was 3 percent during the last fiscal year, which will grow to 6 percent in fiscal year 2015.
The Fund said in the report that Consumer Prices Index (CPI) will decrease in the upcoming years as the oil prices expected will remain stable. The Fund projected CPI will reduce to 6 percent from 11.5 percent adding that the CPI will remain 7.5 percent in the current fiscal year.
The IMF also forecasted for further reduction in the current account deficit during the next five years due to measures of Pakistani authorities. The current account deficit will grow once again from 3.8 percent to 4.1 in the current fiscal year but it will reduce during next years and is expected 3.4 in the fiscal year 2015.
Gross domestic product growth forecast for Asia in 2010 was revised to 7.5 percent from 7.0 percent in April. For 2011, when stimulus programmes are expected to be withdrawn in several countries, Asia’s GDP growth is expected to settle to “a more moderate but also more sustainable rate” of 6.8 percent, the IMF said in a report.
The Chinese economy should expand by 10.5 percent following strong rebound in exports and resilient domestic demand, the fund said, revising its April forecast of 10.0 percent, the report said.
India’s growth in the current fiscal year was revised higher to 9.4 percent from 8.8 percent previously as robust corporate profits and favourable financing conditions fuel investment. It said China’s growth could slow to about 9.6 percent in 2011, when further measures were taken to slow credit growth and maintain financial stability. India’s growth is expected to settle to 8.4 percent next year.
In Japan, growth was now expected to reach 2.4 percent in 2010, due to mainly stronger-than-expected exports during the first half of the year, before easing to about 1.8 percent in 2011 as fiscal stimulus gradually tapered off.
The five key Southeast Asian economies of Indonesia, Malaysia, the Philippines, Thailand and Vietnam were expected to grow by an average 6.4 percent in 2010 and 5.5 percent next year. Though Asia has only limited direct financial linkages to the most vulnerable euro area economies, the IMF warned that a stall in the European recovery that spilled over to global growth would affect Asia through both trade and financial channels.
“Many Asian economies (especially the newly industrialized economies and the Asean economies) are highly dependent on external demand, and their export exposure to Europe is at least as large as their export exposure to the United States,” the report said. However, in the event of “external demand shocks,” large economies such as China, India and Indonesia could provide a cushion to growth, it said.