KARACHI – The State Bank of Pakistan (SBP) in its annual report for fiscalyear 2017-18 on State of Pakistan’s Economy stated that the growth momentumgained further strength as the economy achieved its 13-year highest realGDP growth of 5.8 percent in FY18.
In the report issued on Thursday, the SBP said that the GDP growth was alsobroad-based, as all the three sectors – agriculture, industry and services– contributed positively to this acceleration, the Report highlights.
The report states that the acceleration in GDP growth was supported by hostof factors, including low cost of financing, improved energy supplies,favorable business sentiments, fiscal incentives through subsidies andincreased access to credit.
At the same time, higher public spending and progress on CPEC-relatedprojects stimulated economic activities besides inducing firms to enhancetheir production capacities.
The Report highlights that the pickup in GDP growth, however, came at thecost of widening of macroeconomic imbalances as manifested in a five-yearhigh fiscal deficit and a record high current account deficit in FY18.
The Report also points out that like previous expansionary cycles inPakistan the growth in FY18 was led by a surge in consumption. It furtherunderlines the need for increase in investment to sustain higher economicgrowth.
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In addition, the Report features a special chapter dedicated to thedigitization of services in Pakistan. The chapter documents the notabledevelopments taking place across three key domains include e-commerce,fintech and e-government.
It makes a compelling case for stakeholders to further facilitate theadvance of digitization, given its potential to trigger investment ,financial inclusion, productivity gains, and entrepreneurship – all ofwhich can, in turn, be a boon for economic growth.
The report also discusses several aspects of CPEC Long Term Plan related tothe development of agriculture sector of Pakistan.
