Pak economy to expand two per cent in 2012: IMF

Pak economy
International Monetary Fund

DUBAI: The economy of Pakistan will expand by about two per cent in 2012, the International Monetary Fund (IMF) said in its latest report.

Economies of the Middle East and North Africa will expand by 5.1 per cent this year from 3.3 per cent in 2011, the International Monetary Fund (IMF) said, gulfbusiness.com and arabianbusiness.com reported.The GCC countries are on track to post robust growth rates in 2012, supported by ‘expansionary fiscal policies and accommodative monetary conditions,” the IMF said in its latest MENAP (Middle East, North Africa and Pakistan) Outlook report.

Though oil-exporting countries are growing at an average of 6.6 per cent on the back of higher oil prices, oil importing nations – Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Sudan, and Tunisia – will see a lower rate of about two per cent, the Washington-based organisation said in a report issued on Sunday.“The biggest challenge facing governments in the Arab countries in transition is how to manage the rising expectations of populations,” Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, said in a statement.

He added that people “are becoming increasingly impatient to see a transition dividend at a time when there are threats to near-term macroeconomic stability and the margin for policy manoeuvre is limited”.Ahmed said the economic outlook for the Middle East and North Africa region was mixed.Most of the region’s oil-exporting countries are growing at healthy rates, while the oil importers face subdued economic prospects. The region’s oil-exporting countries are expected to post solid growth in 2012, largely on account of “Libya’s better-than-expected post-conflict recovery”.

In the GCC countries, growth remains robust, supported by expansionary fiscal policies and accommodative monetary conditions.However, the GCC region growth is expected to slow down from 7.5 per cent in 2011 to 3.75 per cent in 2013 as oil production reaches a plateau.Oil prices are expected to remain above $100 per barrel in 2012-13. As a result, the oil exporters’ combined current account surplus is likely to remain near a record high of about $400 billion in 2012.

“This has helped governments to respond to growing social demands by increasing expenditure on wages and salaries, which rose dramatically in most oil exporters in recent years,” Ahmed said.“The main issue facing Middle East oil exporters is how to take advantage of their current positive position to strengthen their resilience against oil price declines and diversify their economies to boost private-sector job creation.“Fiscal policy could gradually shift to bolstering national savings, and countries could ease the pace of government spending, especially on expenditures that are hard to reverse – like public sector hiring,” he said. – Nation