The International Monetary Fund (IMF) on Tuesday slashed its growth forecast for Pakistan to 2.6 per cent, citing the impact of US tariffs now at 100-year highs and warning that rising trade tensions would further slow growth.

The IMF released an update to its World Economic Outlook compiled in just 10 days after US President Donald Trump announced universal tariffs on nearly all trading partners and higher rates, currently suspended, on many countries. Pakistan was hit by a 29pc tariff on goods it exports to the US, which economists say could bring immediate hurdles but also long-term opportunities.

In January, the IMF had lowered the country’s growth estimate to 3pc for the current fiscal year, down from 3.2pc it had projected previously.

In its latest update, the IMF slashed the growth estimate to 2.6pc for the current fiscal year and 3.6 for the next fiscal year. It also put the inflation estimate at 5.1pc and 7.7pc for the current and next fiscal years.

The increase in trade tariffs on Pakistani products could have a devastating impact on Pakistan’s important exports and serves as a wake-up call for diversification, according........

© Dawn Business