The monthly report from the Predictors of Money anticipates an expansion pace of between 13.5% and 14.5% for May in light of early signs of an Economic Recovery upturn.
Negotiations with the IMF Loan Program
It is important to note that formal discussions about a new three-year loan program have started, as per this report. The International Monetary Fund’s loan programs are necessary for consistent policy implementation, which in turn helps stabilize an economy’s external sector.
Investment Boost from IMF Loan Enhanced
Moreover, the Ministerial Department points out that financial credit given by the International Money Fund (IMF) will increase investments. This year alone, agricultural production has grown by 6.25% while maintaining stability through steadfastness to policies.
Previous Predictions and Economic Improvement
The Ministry of Finance’s monthly economic report said in March that inflation would decline to 21%-22% this April, having noted the country’s economic situation was getting better with its international financial institutions’ financing resuming. The agreement for the final tranche of $1.1 billion from the IMF had been concluded. Government reforms and policy measures were reducing pressure on external payments, although better financing for these payments remained necessary.
Central Bank’s Interest Rate Decision
The report also mentioned that the State Bank had maintained the interest rate at 22%. The decision to keep the interest rate unchanged was due to concerns about potential increases in inflation.
Government Measures to Control Inflation
The Ministry of Finance stated that government measures were bringing inflation under control. A historic sale under the Ramadan Relief Package was being conducted, and timely policy actions were required for sustainable economic stability.
Broader Economic Context and Future Outlook
The economic report also puts the current situation in a wider context, stating that despite many ongoing problems, there are several positive signs. For instance, foreign exchange reserves have improved slightly, while International Investors’ confidence is growing daily. Furthermore, the export sector has proved to be resilient, thereby making a positive contribution to the trade balance.
Policy Continuity and Structural Reforms
The ministry points out that policy continuity, together with structural reforms, is vital for long-term economic health. It indicates that efforts to consolidate tax collection and enhance governance are bearing fruit, as shown by higher-than-expected revenue collections recorded during the last quarter.
Social Safety Nets
Inflation has hit low-income earners hard, hence the need to expand social safety nets to cushion them from such effects. In this regard, programmed targeting direct cash transfers and subsidies on basic commodities will be scaled up to reduce vulnerability among communities facing rising prices.
