Pakistan real GDP growth projected at 5 percent for FY 2021

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Pakistan real GDP growth projected at 5 percent for FY 2021

KARACHI: The State Bank of Pakistan (SBP) has projected the real GDP growth at 4 per cent to 5 per cent for the current fiscal year, as per the actual target set for the fiscal year. However, the current account deficit has been projected at up to 3 per cent of the GDP as against the actual estimate of 0.7 per cent for the fiscal year 2021/22.

In its Annual Report 2020/21 on the “State of Pakistan’s Economy” issued on Wednesday, the SBP said the average Consumer Price Index (CPI) would be around 7 per cent to 9 per cent.

The remittance inflows and exports have been projected at $32.5 billion and $27.5 billion, respectively, during the current fiscal year; however, the import bill projection has gone up to $63.5 billion as against the actual estimate of $55.3 billion.

Similarly, the fiscal deficit has been estimated to be in the range of 6.3 per cent and 7.3 per cent for the current fiscal year against the target of 6.3 per cent.

According to the report, Pakistan’ economy rebounded during FY21, with the real GDP growth rising to 3.9 per cent. Importantly, this expansion in the economic activity was accompanied by a 10-year low current account balance that contributed to a significant buildup in foreign exchange reserves.

The fiscal deficit also edged down despite the Covid-related spending, leading to an improvement in the public debt-to-GDP ratio, unlike the experience of most countries across the world.