Pakistan sets three-year economic plan targeting 5.7% growth

For current financial year, goods exports estimate $35.28bn, services exports project $8.38bn

The federal government has set ambitious economic targets for the next three years, aiming to raise the GDP growth rate to between 4.2% and 5.7%. Other targets include increasing the size of the national economy to Rs162,513 billion, boosting exports by more than $10 billion, and increasing remittances to a record $44.82 billion.

According to the three-year Macroeconomic and Fiscal Framework issued by the Ministry of Finance, significant growth is expected in exports, remittances, tax revenue, and the overall size of the economy.

The report projects that Pakistan’s exports will rise from $44.83 billion to $55 billion over the next three years — an increase of more than $10 billion. Exports of goods are forecast to reach $42.69 billion, while exports of services, including information technology, are estimated at $12.24 billion.

Read: Pakistan likely to get $1.2b IMF tranche

For the current financial year, the export of goods is estimated at $35.28 billion, with services exports projected at $8.38 billion. Imports are expected to rise by $14.5 billion, reaching $79.71 billion. Remittances are projected to hit a record $44.82 billion in three years, compared with $39.43 billion expected during the current fiscal year.

The International Monetary Fund (IMF) has projected Pakistan's economic growth rate at 3.6% for the current fiscal year.

Contrary to the forecast of 3.6% economic growth, sources have said that during last week's inconclusive discussions, the IMF staff had projected 3% to 3.5% growth. They said that the IMF's view was that the recent floods have weighed on the economic outlook, particularly for the agriculture sector, given the damage to major Kharif crops.

Read more: IMF projects Pakistan's growth at 3.6%

The Pakistan government has already downward adjusted its 4.2% ambitious target to 3.5% while the World Bank has made a forecast of 2.6% for the same reason.

The sources said that even in the medium term, the IMF was not projecting more than a 4.5% economic growth rate for Pakistan, that too is hinging upon the support from any meaningful increase in exports and investment.

The Executive Board of the IMF is expected to approve the third instalment of $1 billion for Pakistan under the Extended Fund Facility (EFF) programme during its meeting scheduled for December.

The Fund is also likely to provide $200 million under climate financing, which will be made available through the Climate Resilience Financing mechanism.

The staff-level agreement between Pakistan and the IMF was finalized on October 15. Officials from the Ministry of Finance are optimistic that the next instalment under the ongoing loan programme will be approved.