A senior economist with Moody’s Analytics told Reuters that Pakistan’s inflation could average 33% in the first half of 2023 before trending lower and that a bailout from the IMF alone is unlikely to restore the country’s economic health.
“In our opinion, an IMF bailout won’t be sufficient to revive the economy.” Senior economist Katrina Ell said in an interview on Wednesday that persistent and cautious economic management is crucial for the economy.
PAKISTAN INFLATION AT 48-YEAR-HIGH AS SUPPLIES JAM IN PORTS
There is still an inevitably difficult journey ahead of us. She continued, “We anticipate that market and economic austerity will last well past 2024.”
Last week, the Pakistani government and the IMF were unable to come to an agreement, and after 10 days of talks, a visiting IMF delegation left Islamabad while still promising that talks would go on. As it struggles with a devastating economic crisis, Pakistan is in desperate need of money.
If an agreement was reached on the programme’s ninth review, more than $1.1 billion of the $2.5 billion that is still owed as part of the current package, which was agreed to in 2019 and expires on June 30, would be released. The economy needs the money because its meager foreign exchange holdings can only barely pay for imports for 18 days.
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Ell claims that despite the economy being in a serious downturn, some of the most recent bailout conditions have resulted in extremely high inflation.
We anticipate that inflation will typically hover around 33% during the first half of this year and then possibly trend a little bit lower after that.
The consumer price index experienced its highest annual growth rate in nearly 50 years in January, rising by 27.5%.