The International Monetary Fund (IMF) has decided to seek revised economic data from Pakistan in light of the recent floods that have raised concerns over their potential impact on the country’s growth and fiscal targets, according to IMF sources.
The Fund fears that the devastating floods could significantly affect Pakistan’s agriculture sector, leading to a possible decline of 0.25 to 0.50 percent in GDP during the current fiscal year.
IMF sources said that the organisation had earlier projected Pakistan’s GDP growth between 3.25 and 3.5 percent, but these estimates may now be reviewed once the updated data reflecting the flood impact is received.
The Federal Board of Revenue’s (FBR) tax collection targets are also likely to be revised downward, the sources added. However, the IMF has assured that necessary measures will be taken if the government fails to meet its revenue targets, and a revised tax plan will be presented to the Fund for approval.
The floods are also expected to put pressure on Pakistan’s external sector, with the current account deficit projected to widen in the current fiscal year.
Sources warned that the deficit could reach one percent of GDP within the next five years if corrective measures are not implemented.
