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SBP projects GDP growth to go down to 3.5%, CPI inflation at "highest at 6.5%

Discussion in 'Pakistan Economy' started by Muhammad Omar, Mar 26, 2019.

  1. Muhammad Omar

    Muhammad Omar ELITE MEMBER

    Feb 3, 2014
    +16 / 19,648 / -1

    In a quarterly report, State Bank Of Pakistan projects real GDP growth to go down to 3.5%, says CPI inflation at "highest level in 17 consecutive quarters to 6.5%.

    Upward revision in the prices of natural gas by the government has alone contributed around 1.0 percentage point in the recent surge in inflation," said the SBP.

    The fiscal deficit continued to stay high despite a sharp cut in development spending since the beginning of FY19. While revenue collection declined, current expenditures increased substantially. Rising interest rates and exchange rate depreciation are contributing to the sharp increase in the latter; whereas, a slowdown in economic activity took a toll on the former despite some compensation from higher inflation and exchange rate adjustments. The resulting financing of the budget deficit fell mostly on borrowing from the central bank, as the government resorted to limited external borrowing."