*ISLAMABAD: Pakistan’s GDP growth is unlikely to cross 3 percent in thenext fiscal year (2022-23) due to contractionary monetary and fiscalpolicies under the International Monetary Fund (IMF) programme.*
While talking to *Business Recorder*, former Finance Minister Dr HafeezPasha said the government would be asked by the IMF to reduce the PSDP sizefor next fiscal year and increase discount rate, which would have a directimpact on the growth prospects for next fiscal year.
He further stated that increase in Public Sector Development Programme(PSDP) spending is one of the two prerequisites for GDP growth as a studyrevealed that one percent increase in PSDP as a percentage of GDPcontributes 1.7 percent to the growth.
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Hafeez Pasha was skeptical about higher spending for the PSDP especially ifthe IMF Extended Fund Facility (EFF) is revived and stated that in thecoming fiscal year the IMF would like the government to limit federalcomponent of the PSDP at Rs 600 billion, which would be less than onepercent of the GDP. Thus one percent PSDP spending means 1.6 percent GDPgrowth.