ISLAMABAD (Dunya News/Web Desk) – The Pakistani authorities have shared a macroeconomic framework for the next fiscal year with the IMF mission during the ongoing talks, sources say, with an estimated GDP growth rate of 3.7 per cent and inflation rate dipping to 11.8pc.
However, the IMF thinks that the GDP will grow at a slightly lower pace of 3.5pc while inflation is going to stay at 12.7 pc – a projection that is 0.9pc higher than the suggested by the Ministry of Finance.
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The positive forecast about declining inflation comes as April consumer price index (CPI) dipped to 17.6pc – the lowest since May 2022 – in continuation of a trend witnessed during the past three months as well.
The sources say the government is eyeing 4.0pc growth in industrial sector followed by 3.7pc in the case of services and 3.5pc for agriculture in 2024-25.
INTEREST REPAYMENTS
Meanwhile, it is projected that Pakistan will have to spend over Rs9,700 billion on interest repayments as the country is grappling with an unprecedented debt repayment crisis.
Read more: Govt bonds are borrowing instruments. High interest rates means more deficit
CURRENT ACCOUNT DEFICIT
The Washington-based lender, which is currently involved in talks for another IMF programme for Pakistan, has projected a $4.6bn current account deficit (CAD). However, the finance ministry is setting a target of $4.2bn for 2024-25.
FOREIGN RESERVES
An inflow of more than $63bn is being expected by economic wizards in Islamabad through exports and remittances, as the government has set higher targets for the next financial year.
In this connection, exports are supposed to produce a sum of $32.1bn against an estimated imports of $58bn, thus reflecting a trade deficit of around $26bn.
Remittances – the other source of inflow – are projected to stay around $30.6.
However, the IMF estimates are again higher in the case of imports which, according to the world’s top lender, will hover around $61bn.
REVENUE AND EXPENDITURES
The sources say the government has estimated a fiscal deficit of Rs9,600bn and proposed setting the revenue collection target of more than Rs12,000bn.
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Meanwhile, the authorities have suggested allocating Rs1,000bn for the federal Public Sector Development Programme (PDSP) and projected that the pension bill will increase to Rs960bn from the current level of Rs801bn.