WASHINGTON: In its latest World Economic Outlook report, the International Monetary Fund has included Pakistan in emerging market economies.
An emerging market economy is the one that is progressing toward a more advanced stage, usually by means of rapid growth and industrialization. These countries experience an expanding role both in the world economy and on the political frontier.
The IMF projects that Pakistan’s real GDP will continue to grow modestly, reaching 5.2 percent by 2020.
It was 4.0 percent in 2014, 4.2 percent in 2015 and is projected to reach 4.5 percent in 2016.
Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes — inflation or deflation.
The IMF statistics, included in its 2015 World Economic outlook report, also show that consumer prices in Pakistan increased by 8.6 percent in 2014 but reduced to 4.5 percent to 2015. The prices will rise slightly to 4.7 percent in 2016 and are projected to reach 5.0 percent in 2020.
A consumer price index measures changes in the price level of a market basket of consumer goods and services purchased by households.
The annual percentage change in a CPI is used as a measure of inflation.
Pakistan’s current account balance was minus 1.3 percent in 2014, improved to minus 0.8 in 2015 and is projected to further improve to minus 0.5 in 2016.
The current account balance shows the difference between a nation’s savings and its investment and is an important indicator of an economy’s health.
A negative current account balance indicates that the country is a net borrower.
Pakistan’s unemployment rate in 2014 was 6.7 percent, which drops slightly to 6.5 percent in 2015 and is projected to drop further to 6.0 percent in 2016.
The unemployment rate is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.
The IMF also placed Pakistan among the net creditor countries on its net International Investment position index.
It shows Pakistan’s current account balance as minus 0.8 in 2015, which is projected to improve to minus 0.5 in 2016 but may drop to minus 0.9 in 2020.
The current account balance shows the sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers.
The IMF also notes that in 2009 Pakistan experienced a large exchange rate depreciation not associated with banking crises.
Published in Dawn, November 8th, 2015