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Global Economic Outlook

Pakistan Outlook: The Politics of Fiscal Austerity

By Arpitha Bykere and Ayoti Mittra

  • The IMF will continue to back Pakistan but will seek stronger fiscal tightening, which will boost inflation and reduce government popularity and political support.
  • Remittances, portfolio inflows and foreign loans are critical for the current account to weather higher oil prices and falling FDI.
  • U.S.-Pakistan relations are at a…

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