Islamabad: Not far from the conceived macroeconomic framework, Pakistan has told the International Monetary Fund (IMF) that it expects the current account reduction (CAD) by $2 billion to $6.5 billion compared to $6.5 billion Expected by the end of June 2024, The News reported on Tuesday.
The projection at the bottom of the CAD indicated that the government was expecting imports to continue to decline over the remainder of the current financial year.
Between the difficulties in bringing the arrival of the external dollar to the desired mark، Pakistani authorities have no choice but to reduce CAD to prevent the payment balance crisis.
Pakistan’s external financing requirements stood at the CAD projection of $28 billion — $ 23.5 billion foreign debt service and $4.5 billion.
Following the signing of the IMF Agreement under the $3 billion Standby Arrangement (SBA) program, Forex’s reserves improved in July 2023, but in the last two months, External loans and grants have slowed down. Authorities are now expecting the completion of the first review of the IMF program to increase the arrival of dollars from multilateral and bilateral lenders.
Economist Dr. Hafiz A. Pasha estimates that the difference in external financing for the current financial year can be approximately $6 to $7 billion and the completion of the IMF’s review can be about <TAG1>6 to <TAG1>7 billion Islamabad will help reduce this gap.
“ Current account deficit in the first quarter of the current financial year $0.947 billion, Therefore, CAD as a whole is expected to be limited to $4.5 billion compared to the first estimates of $6.5 billion for FY24, ” sources told The News on Monday.
These estimates are shared with the IMF Review Mission, which is engaged with Pakistani authorities under the $3 billion SBA program.
The government plans that exports will be about $30.843 billion while imports will be $64.7 billion in the current financial year.
The Ministry of Finance’s estimates to see an improvement in the overall trade balance are based on the hope of increasing rice exports in the context of increasing production of 2 million tons of rice and cotton Give 5 million extra gant. However, sources said the import bill could be reduced from the expected amount of $64.7 billion for the current financial year to $58 billion.
There is another danger that remittances can also be seen due to the perceived target as it is less than $32.889 billion compared to the official estimate of $30 billion May be for the current financial year.
The government expects GDP growth to increase by about 3.5% after better performance in the agricultural sector and an increase of about 3% in the large manufacturing sector Can%.
Inflation based on the Consumer Price Index (CPI) is expected to reach an average of 21% in the current financial year. Reducing commodity imports, improving the exchange rate and better supply of goods will help reduce inflation on a monthly basis for the rest of the current financial year.
