IMF: Stung by virus, Pakistan’s growth rate to hit negative 1.5 percent

A man stands along with his son which wears a facemask at a shop during a government-imposed nationwide lockdown as a preventive measure against the COVID-19 coronavirus, in Rawalpindi on April 13, 2020. (AFP)

• IMF says global economy will experience its worst since 1930s
• Pakistan expected to get $1.4 billion from IMF this week to deal with the adverse economic impact of the pandemic

ISLAMABAD: Pakistan’s economic growth will hit negative 1.5 percent during this fiscal year, the International Monetary Fund (IMF) says in its latest forecast, as the world economy stung by the coronavirus is going to suffer its worst year since the Great Depression of the 1930s.
The global economy is going to contract by 3 percent in 2020. “It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” the IMF said in its World Economic Outlook (WEO) released on Tuesday.
Pakistan’s unemployment rate, according to the report, would be up from 4.1 to 4.5 percent. On Sunday, the World Bank also projected Pakistan’s economic growth to range between negative 2.2 to negative 1.3 percent.
According to Dr. Abid Qaiyum Suleri, executive director of the Pakistani think tank Sustainable Development Policy Institute (SDPI), “G-20, IMF, and World Bank etc., have to support other countries for themselves, as far as this disease is prevalent in any part of the world other parts of the world can also be affected.”
Pakistan is expected to receive $1.4 billion from IMF this week to boost its foreign exchange reserves and budget in the wake of the economic slowdown. Last month, it requested a low-cost, fast-disbursing loan under the fund’s Rapid Financing Instrument (RFI) to deal with the adverse economic impact of the pandemic.
“People in the developing world face a starker choice: death by COVID-19 or by hunger,” Prime Minister Imran Khan said in a statement after a phone call with German Chancellor Angela Merkel on Tuesday.
The Pakistani premier has been urging the global community to launch an initiative to give debt relief to developing countries, as the COVID-19 pandemic has unfolded an unprecedented global health and economic crisis. Developing countries, he argued, will be hit harder due to lack of fiscal space and debt servicing.
He expressed hope that countries like Germany would lead the initiative during the Group of 20 (G-20) Finance Ministers Meeting and Spring Meetings of the IMF and the World Bank.
The $1.4 billion IMF loan for Pakistan to deal with the COVID-19 crisis is additional to the country’s $6 billion bailout package signed with the IMF in July last year to stave off a balance of payments crisis.