The Economic Outlook for 2022-23 The prospects for world trade are accordingly not positive. There was fast growth of over 10 percent in 2021 as the world recovered after COVID-19. The growth is expected to be much lower at 4.3 percent in 2022 and even lower at 2.5 percent in 2023. Table 4.1 gives the projection of prices of different commodities. The IMF does not expect a substantial lowering of the overall commodity price index in 2023, from the peak levels attained in 2022. While the price of crude oil, wheat, cotton could fall significantly in 2023, prices of LNG and rice could be higher than the level attained in 2022. 4.2 Projections of Pakistan Economy Prior to the Floods Table 4.3 presents two sets of projections. The first set has been extracted from the projections contained in the IMF Staff Report after completion of the seventh and eight reviews, which was released on the 1st of September 2022. The second set of projections are from the Annual Plan for 2022-23 prepared by the Planning Commission. The GDP growth rate in 2022-23 has been projected by the IMF at a moderate rate of 3.5 percent. This presumably reflects the impact of contractionary fiscal and monetary policies to reduce the two deficits sharply as part of the Program. The Annual Plan retains an air of optimism and expects the growth momentum to be sustained after 2021-22 with a 5 percent growth rate in 2022-23. There is also a big divergence in the inflation rate projections. At the time when the IMF Staff Report was being finalized, the YoY rate of inflation in August 2022 had hit the peak of 27.3 percent. The IMF expects the inflation rate in coming months to moderate and average close to 20 percent over the year. However, the Annual Plan projection of 11.5 percent is completely out of touch with reality. Table 4.3: Macroeconomic Projections of the Economy of Pakistan 2021-22 (Actual) 2023 (Projections) GDP Growth Rate –(%) • Annual Plan 6.0 5.0 • IMF 6.0 3.5 Level of Investment –(% of GDP) • Annual Plan 15.1 14.7 • IMF 15.1 16.8 Rate of Inflation –(%) • Annual Plan 12.2 11.5 • IMF 12.2 19.9 Source: IMF and Planning Commission 49