Pakistan’s Unemployment rate to reach 5.1 per cent, warns IMF

International Monetary Fund (IMF) has warned of Pakistan’s unemployment rate reaching 5.1 per cent – highest in the past three decades.

IMF in its recent report titled ‘World Economic Outlook, October 2020: A Long and Difficult Ascent’, the organization has predicted Pakistan’s unemployment rate to reach 5.1 per cent in 2021.

The 5.1 per cent unemployment rate is the highest that the country has observed in the last 30 years, as Pakistan’s unemployment rate has previously been maintained at below 1 per cent from 1991 to 2011.

The unemployment rate has been predicted to reach 4.5 per cent in 2020, as compared to the previous 4.1 per cent last year.

 Meanwhile, the inflation rate is expected to be decreased to 8.8 per cent in 2021 from this year’s 10.7 per cent.

It is imperative to know that Pakistan witnessed economic contraction for the first time in 68 years in 2020, primarily due to economic repercussions of COVID-19 pandemic.

Pakistan’s economy contracted by around -0.4 per cent (negative) in 2020, and the country’s GDP is expected to recover by 1 per cent in 2020, said the IMF report.

 In addition to it, country’s current account balance was improved to -1.1 per cent in 2020 from -4.9 per cent. However, IMF predicts Pakistan’s current account balance to worsen in 2021 by up to -2.5 per cent.