In the latest survey conducted by Bloomberg between October 4 and 6,Pakistan’s economic outlook for the fiscal year 2024 appears subdued. TheGross Domestic Product (GDP) growth rate is expected to expand by a modest2.4 per cent, which reflects a significant slowdown compared to theprevious estimate of 3.5 per cent in Bloomberg’s prior survey.
Looking ahead to 2025, there is a slightly more optimistic projection, withthe GDP expected to grow by 3.7 per cent year-on-year. However, amidstthese numbers, there are concerning indicators. Inflation is anticipated toremain high, with the Consumer Price Index (CPI) forecast to increase by28.14 per cent year-on-year in the fourth quarter of 2023, a sharp risefrom the earlier estimate of 21.39 per cent for the same period.
This trend is expected to persist into the first quarter of 2024, with theCPI projected at 22.85 per cent year-on-year, considerably higher than theprevious estimate of 15.43 per cent. These figures highlight the challengesfacing Pakistan’s economic stability.
The survey also revealed that the State Bank of Pakistan (SBP) is likely tomaintain the 23 per cent discount rate until the end of the fourth quarterof 2023. Additionally, the target policy rate, presently at 22 per cent, isanticipated to remain unchanged during this period.
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Economists, including Andrew Vogel from S&P Global, have expressed concernsabout Pakistan’s economic fragility, even in light of the recent IMFagreement. Vogel said that despite the agreement, Pakistan’s economyremains weak, with a high risk of recession. He suggested thatstabilisation in political conditions could pave the way for substantialimprovements in financing and overall economic conditions.