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Economy set to achieve 6pc GDP growth: SBP report

Discussion in 'Pakistan Economy' started by farhan_9909, Jan 20, 2018.

  1. farhan_9909

    farhan_9909 PROFESSIONAL

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    KARACHI: The State Bank of Pakistan (SBP) said on Friday that prospects for economic growth remain strong, noting that the economy is poised to achieve the growth target of six per cent for 2017-18.

    In its first quarterly report on the state of the economy, the SBP said rising income levels of consumers are fuelling retail sales and commercial activities.

    However, there was an urgent need for finding more avenues for foreign exchange earnings and realigning policies favouring exports growth by addressing long-term structural impediments.

    “For the external sector, recent gains in exports growth and foreign direct investments (FDI) while significant were not enough to contain the overall balance-of-payments deficit,” said the report.

    It added that the widening of the current account deficit associated with increased economic activity is a recurrent phenomenon in Pakistan and has undermined maturing growth cycles in the past.

    While the report expressed satisfaction over the increased revenue in the first quarter of 2017-18, it said that earlier efforts aimed at increasing the tax base need to be more concerted and perhaps require new, innovative methods.

    Says recent gains in exports ‘not enough to contain’ BoP deficit

    The report raised the question whether the economy is doing well enough to sustain the virtuous equilibrium of high growth-low inflation into the medium and long terms. The report stressed the need for addressing the long-standing structural reforms in the fiscal and the external sectors for sustainability.

    The report analysed the recent growth in exports and identified three reasons for it. Uninterrupted energy supplies to the manufacturing sector, increasing global demand and commodity prices and the recent exchange rate deprecation.

    What stands out is the role of a benign inflationary environment for some time now that has helped spur the expansion in economic activities. Low and stable prices have facilitated and eased the process of economic decision-making.

    “More tangibly, falling inflation along with healthy agriculture output and stable exchange rate has resulted in higher real rural incomes and urban wages. The resultant boost in consumption forms an integral part of the current economic growth paradigm,” said the report.

    Low inflation has also allowed the SBP to cumulatively cut the policy rate by 425 basis points since the autumn of 2014.

    The report suggested that average inflation in 2017-18 would remain below its annual target of 6pc.

    However, there are two major risks to this inflation forecast: first, recent exchange rate depreciation through expectations channel and, after some lag, through the higher imported goods’ price can seep into domestic prices; second, uncertain global oil prices pose both upside and downside risks.

    The report said in the first quarter, the fiscal deficit was 1.2pc of gross domestic product, lower than 1.4pc recorded in the corresponding period of the last year.

    Total revenue recovered strongly, showing an 18.9pc increase in the three-month period against an 8pc decline in the same period a year ago.

    “Against this, consolidated federal and provincial expenditures grew 12.8pc compared to 2.8pc increase in the same period last year,” said the report.

    Published in Dawn, January 20th, 2018



    https://www.dawn.com/news/1384026/economy-set-to-achieve-6pc-gdp-growth-sbp-report
     
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  2. Homo Sapiens

    Homo Sapiens SENIOR MEMBER

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    Very good.Congratulations.
     
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  3. Tumba

    Tumba BANNED

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    for countries whose nominal per capita is less than 5000 USD anything less than 8% means nothing on ground is basically changing.. anything less that 8 means country is just surviving ever increasing global resource crunch & inflation. Sadly all of Indian sub-continent unless grows in double digits will remain slum area of planet.
     
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  4. Thanatos

    Thanatos FULL MEMBER

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    Couldnt agree more, Pakistan has just started to pick up ever since the early harvest projects of CPEC have completed and the security situation in the country has improved. However if things continue to improve Pakistan's GDP will cross 8.0 after 2020.
     
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  5. Areesh

    Areesh ELITE MEMBER

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    This BC @SunilM is missing as expected. He won't come here. I can guarantee that.
     
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  6. BetterPakistan

    BetterPakistan SENIOR MEMBER

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    Good news. Pakistan GDP growth accelerating year on year. I hope exports touches 15% growth this year too.
     
  7. Areesh

    Areesh ELITE MEMBER

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    Mentally challenged pig @SunilM is still not here

    What should we do to bring him here? Well he won't come here.

    However I can confirm that he is about to get pink in next 24-48 hours. @Pluralist
     
  8. Samlee

    Samlee SENIOR MEMBER

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    This Is The CPEC Effect It Is Removing The Bottlenecks To Pakistan's Growth(Energy and Infrastructure)
     
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  9. N.Siddiqui

    N.Siddiqui SENIOR MEMBER

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    One need to be close to their friends and closer to their enemies, know your enemy, their thinking, their opinions and thought process, so I don't mind them here, half the fun will be lost...

    Rebuking, rebuttal and pointing to the falsehood is a better option and it goes both ways.
     
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  10. Areesh

    Areesh ELITE MEMBER

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    It is only fun when other side is a sane mind and not mentally retarded.

    This soft troll should be taken care of immediately.
     
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  11. protest

    protest BANNED

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    Seriously? One single line with no evidence about six percent growth. The rest of the article goes on about dangers of balance of payments looming on Pakistan, yet you want @SunilM to justify his take on Pakistan's economy.

    No body is saying Pakistan economy isn't doing great internally, but your external trade is screwed. Sooner or later it'll effect the internal.
     
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  12. ziaulislam

    ziaulislam ELITE MEMBER

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    great news, apart from issues on external front we are doing good
    that was because of poor policy in trying to protect the rupee( which is now gone thanks for heart attack Mr Dar had) with more rational and more educated people in our economics front i expect things to get better...i also hope oil prices dont pick up

    in long run govt will have to focus one education and health sector to attain sustained growth or we will end up like other countries who witnessed a brief infrastructure driven growth that just dried up...

    its also important that current system runs its course, if govt completes its tenure and have fair elections that would be a big boast as it would be mean that any future "political "uncertainties will squashed as being part of democracy...

    govt needs to lower taxation on co operation 30% is too high and unsustainable....

    also taxation needs to be more realistic, tax refunds should be transparent and fiscal deficit has to be contained, Pakistan debt serviceability is very high(25% of revenues vs ideal of around 15%) due to spending spree recently

    if certain out layers are counted(PIA,circular debt,govt grantees and steel mills debt) our gdp to debt hits 70% which is certainly way higher than 60% limit

    why did you felt the need to quote idiots
     
  13. Enigma_

    Enigma_ FULL MEMBER

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    Good news but 7% should be the aim.
     
  14. ziaulislam

    ziaulislam ELITE MEMBER

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    so..
    balance of payment is not an issue due to massive investment inflows in short term..but even if it is an issue..
    Pakistan can simply either get some loan from IMF or float some bonds..our foreign debt is not more than 30%

    remittance and exports are showing fast growth
     
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  15. Areesh

    Areesh ELITE MEMBER

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    The article is basically saying that Pakistani economy would continue to grow highest in past many years. Yes ther are dangers that it is facing like any economy including Indian economy but there are various strong positive indicators that losers like mentally retarded Indians like @SunilM continue to ignore. They are so obsessed wit Pakistan that they even ignore sh!t happening in India.

    Not only here. I tagged him on this thread too and as expected b@stard didn't show up.

    https://defence.pk/pdf/threads/paki...n-and-economy-on-a-roll.540156/#post-10186195

    Not quoting him but just tagged him in hope that he might show up which as expected he didn't.