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Islamabad [Pakistan]Dec 31 (ANI): Pakistan’s Ministry of Finance (MoF) has forecast the country’s inflation rate to remain between 21% and 23% as the South Asian nation’s fiscal deficit widens in the current July-October period. 115% more than fiscal year 2022-2023, The Dawn reported.
“For FY23, economic growth is likely to remain below the budget target due to damage caused by floods. The combination of low growth, high inflation and low levels of official foreign exchange reserves is the main challenge for policymakers,” the Treasury warned according to The Dawn reported Friday in its monthly economic update and outlook report.
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The Economic Advisory Wing (EAW) of Pakistan’s Ministry of Finance has prepared a report stating that the government’s fiscal deficit will be 1.5% of GDP (Rs 1.266 trillion) from July to October 2022, compared to 0.9% of GDP in 2018 ( 587 billion rupees) 2021.
Higher markup payments lead to higher spending growth leading to fiscal deterioration. In this situation, the government of Pakistan is faced with the challenge of providing relief to the people in the flooded areas.
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“EAW reported that the average Consumer Price Index (CPI) remained at 25.1% in the first five months of FY23 (July-November) compared to 9.3% in the same period last year.” CPI inflation is expected to remain at 21-23% %,” according to The Dawn.
“The current account deficit for July-November FY23 was $3.1 billion compared to $7.2 billion last year, mainly due to an improvement in the trade balance,” the Dawn report said.
The current account deficit narrowed to $276 million in November from $569 million in October.
Despite acknowledging the problems in the economy, Pakistani Finance Minister Ishakhdar assured investors on Friday that “Pakistan will never default.”
“We are in a tough place. We don’t have the $24 billion in foreign exchange reserves that our (previous) government left in 2016. But it’s not my fault. It’s the system’s fault,” Dar told investors at a memorial ceremony. Pakistan’s first development real estate investment trust plans to list on the stock exchange, the news agency reported.
Dar also criticized “pseudo-intellectuals” for raising the possibility of a sovereign default despite the country’s $1 billion Islamic bond payment earlier this month.
In a recent report, The Dawn quoted the State Bank of Pakistan as saying that the current Pakistani government has avoided focusing on growth in FY23, leading to a decline in growth.
The bank said in its annual statement that the Pakistani government had failed to achieve price stability and financial stability despite sacrificing growth.
Citing international experience, Pakistan’s central bank said in its annual report that countries that prioritized growth at the expense of prices and financial stability were unable to “sustain growth and had repeated boom-bust cycles that then sparked financial crises”. (Arnie)
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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