KARACHI – State Bank of Pakistan (SBP) has raised alarm bells for the Pakistan economy.
SBP said in its Annual Report released on the State of Pakistan’s Economy for the fiscal year 2017-18 on Friday that the inflation would surpass the target.
According to the report, Political and economic uncertainties have cast a shadow over the growth in recent months and the central bank said its projection of 6.2 percent growth for 2019 “appears ambitious” and pulled it down to 4.7 from 5.2 percent.
The central bank said measures included in the supplementary budget by the incumbent government meant the country would miss its growth target of 6.2 percent this fiscal year.
The report said, the growth momentum gained further strength as the economy achieved its 13-year highest real GDP growth of 5.8 percent in FY18. The report also highlights the GDP growth was also broad-based, as all the three sectors–agriculture, industry and services–contributed positively to this acceleration.
The report stated that the acceleration in GDP growth was supported by host of factors, including low cost of financing, improved energy supplies, favorable business sentiments, fiscal incentives through subsidies, and increased access to credit.
At the same time, higher public spending and progress on CPEC-related projects stimulated economic activities besides inducing firms to enhance their production capacities.