Pakistan's current account deficit may remain below $4.5 billion in the current fiscal year, according to the Ministry of Finance.
This is an improvement from the previous projection of $6.5 billion. The improvement is due to lower-than-projected imports, which have fallen by 18.5% in the first four months of the year.
The government is also forecasting that economic growth will remain in the range of 3% to 3.5% in the current fiscal year. This is an improvement from last year's growth rate of 0.3%.
The government is attributing the improvement to increased output of crops, mainly rice and cotton. Inflation is also expected to remain around the official target of 21% in the current fiscal year.
This is due to better supplies, a stronger rupee, and actions taken to reduce prices in markets. The government's projections are more optimistic than those of the IMF.
The IMF in July projected a current account deficit of $6.5 billion, economic growth of 2.3%, and inflation of 25.9% for the current fiscal year.
The government and the IMF are currently in talks about the first review of Pakistan's $3 billion standby arrangement. The government is hoping to convince the IMF to endorse its new projections, which would significantly reduce Pakistan's external financing woes.
