Pakistan - IMF projects inflation rate to hit 14pc by June.

The International Monetary Fund (IMF) has projected that the average inflation rate in Pakistan might hit 14% by June next year - a level that if reached could result in interest rates peaking to 15% and economy drastically slowing down, government sources say.

Such a high level inflation would also carry implications for Prime Minister Imran Khan's most ambitious flagship programme of constructing five-million low-cost housing units. The banks lend money over and above the policy rate, which will reduce the government's options to give subsidy on housing loans.

The sources said due to stabilisation measures, the IMF is also projecting economic growth rate of below 3% for fiscal year 2018-19. These assessments were shared with Pakistan during September 27 to October 4 staff level visit.

Although the IMF has not mentioned the inflation projections in its handout, it did internally share the assessment of average 14% inflation in fiscal year 2018-19 with the Finance Ministry, said sources who negotiated with the IMF.

The issue of inflation and the Gross Domestic Product (GDP) also came up for discussions during the closing meeting between Finance Minister Asad Umar and IMF team. The meeting was held in Q-Block...