Washington: The IMF Tuesday projected a 4.3 percent growth rate for Pakistan this year and a higher 4.7 percent in 2016, noting that the cash-strapped country would benefit from a global fall in crude oil prices.
Releasing its revised regional economic outlook for the Middle East, North Africa, Afghanistan and Pakistan, the International Monetary Fund forecast that in the oil-importing countries, growth is expected to strengthen from 3 percent in 2014 to 4 percent this year.
This is supported by a gradual recovery in the euro area, improved domestic confidence, and more accommodative fiscal and monetary policies.
Lower oil prices are helping, though their impact on near-term growth has been moderated in many countries by incomplete pass-through to retail fuel prices, it said.
The IMF said electricity supply disruptions in countries like Egypt, Lebanon and Pakistan and limited access to bank credit added to headwinds from weak confidence, taking a toll on private sector sentiment.
Lower oil prices, due to their appearance late in the year and slow pass through to local fuel prices, had little effect on reducing production costs and increasing disposable incomes.
The IMF also noted that reserves coverage remains low - around three months of imports - in the region's largest economies, Egypt and Pakistan.
Noting that governments in the region are expected to continue to consolidate their fiscal positions in 2015, with a new focus on revenue measures, the IMF said Lebanon and Pakistan have raised taxes on fuel products.
In some cases higher revenues and savings from energy subsidy reforms will be partly channeled into higher spending on infrastructure, education, and healthcare, it said.
