*KARACHI: Pakistan’s economy is set to surpass last year’s growth rate,while inflation and the fiscal deficit were both contained, whereas revenuegrowth has outpaced last year’s level, according to a second quarterlyreport released on Friday by the State Bank of Pakistan.*

The report also highlights the continued strong performances by agricultureand services, and a four-year record high large-scale manufacturing growthduring the first half of fiscal year 2018.

It pointed out that increased consumer spending has led to a strong growthin durables such as automobile and electronics, while the ongoinginfrastructure and construction activities have stimulated the alliedsectors of cement and steel.

Encouragingly, various industrial players across different sectors areinvesting in capacity expansions and product diversification. The privatesector also continued its borrowing from scheduled banks for long-termprojects.

Furthermore, on the agriculture front all major kharif crops performedwell, except wheat production which came under pressure due to lower areaunder cultivation. However, with adequate inventory of key food items, suchas wheat, sugar and pulses, prices of these commodities remained low,keeping food inflation in check.

There was a sharp fall in price of cigarettes due to favorable adjustmentin the duty structure.

Meanwhile, core inflation remained higher on average in first half FY18 dueto continuously rising education and healthcare costs. However, its pacehas stabilized in recent months.

The report highlighted that the growth in revenue collection outpaced theincrease in expenditures which led to a broad-based improvement in fiscalindicators.

The overall fiscal deficit was contained at 2.2 percent of GDP, down fromlast year’s 2.5 percent.