Daily Times

The International Monetary Fund (IMF) has projected Pakistan’s GDP growth at 1.5 percent in 2021 and 4 percent in 2022, as the IMF is expecting a stronger economic recovery in 2021 as Covid-19 vaccine roll-outs get underway.

The IMF said Tuesday that it expects the world economy to grow by 6 percent in 2021, up from its 5.5 percent forecast in January. Looking further ahead, global GDP for 2022 is seen increasing by 4.4 percent, higher than an earlier estimate of 4.2 percent.

The IMF, in its annual World Economic Outlook (WEO), said the Pakistan economy is expected to grow at 4 percent in 2022 after a contraction of 0.4 percent in 2020. The emerging and developing Asia is anticipated to grow by 8.6 percent in 2021 and 6 percent in 2022.

China, the only major economy that had already returned to pre-pandemic GDP in 2020, witnessed a positive growth rate of 2.3 percent, is projected to grow by 8.4 percent in 2021 and 5.6 in 2022. On the other hand, IMF projected a stronger recovery for India with growth projected to be 12.5 percent in 2021 and 6.9 percent in 2022.

“Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible,” IMF Chief Economist Gita Gopinath said in the latest World Economic Outlook report.

The latest round of fiscal stimulus in the US, along with the vaccine rollouts across the world, have made the group more confident about the global economy this year. “Nonetheless, the outlook presents daunting challenges related to divergences in the speed of recovery both across and within countries and the potential for persistent economic damage from the crisis,” Gopinath added.

The IMF estimated growth of 5.1 percent for advanced economies this year, with the United States expanding by 6.4 percent.

The IMF said the governments should continue to focus on “escaping the crisis” by providing fiscal support, including to their health-care systems. In a second phase, “policy makers will need to limit long-term economic scarring” from the crisis and boost public investment, it added.

“Without additional efforts to give all people a fair shot, cross-country gaps in living standards could widen significantly, and decades-long trends of global poverty reduction could reverse,” Gopinath said.