ISLAMABAD: Pakistan’s economic growth slowed sharply to one of the lowest levels in its history as record inflation and interest rates as well as a stalled bailout from the International Monetary Fund intensify its woes.
National Accounts Committee reports Gross Domestic Product In a statement issued on Thursday in Islamabad, it was provisionally extended by 0.29% for the fiscal year ending June 30. The 5% GDP target set last June was revised to 2.3% in September after last summer’s devastating floods.
As of 1952, according to data from the Pakistan Bureau of Statistics, this is only the fifth time in Pakistan’s history that the growth rate has been below 1%. The last time this happened was in FY2020 when the Covid-19 pandemic hit global economies hard. ,
This is another sign of the mounting challenges facing the Prime Minister shehbaz sharif as he struggles to revive a $6.7 billion IMF loan and avert a default amid an ongoing political crisis. The government has already seen demand suppressed after raising taxes and energy prices, and devalued the currency to comply with IMF demands.
The slowdown is largely due to a reduction in industrial production caused by government restrictions on the import of many raw materials, as it does not have the funds to make those purchases. Agricultural production has also plummeted because of last year’s floods, which submerged a third of the country and displaced millions.
“This is more a managed decline, or a decline by design,” said Mohammad Sohail, chief executive officer of Topline Securities Ltd. Keeping up has helped.
world Bank and the Asian Development Bank have both cut their growth projections for Pakistan. Last month, the ADB said it expected the economy to shrink from 6% to 0.6%. The World Bank’s latest assessment projects 0.4% for the current fiscal, adding that it is likely to “remain below potential in the medium term”.
Political tensions are adding to financial risks ahead of elections due in October, as former Prime Minister Imran Khan shows no signs of backing down in his campaign against the government and the powerful military. Investors are on edge in the impasse. Future financing options also look increasingly uncertain.
Topline’s Sohail said, “The first half of the financial year will be challenging as a new IMF deal is expected to take three to four months and then there will be some political stability after the elections, so things will start improving after December.”
National Accounts Committee reports Gross Domestic Product In a statement issued on Thursday in Islamabad, it was provisionally extended by 0.29% for the fiscal year ending June 30. The 5% GDP target set last June was revised to 2.3% in September after last summer’s devastating floods.
As of 1952, according to data from the Pakistan Bureau of Statistics, this is only the fifth time in Pakistan’s history that the growth rate has been below 1%. The last time this happened was in FY2020 when the Covid-19 pandemic hit global economies hard. ,
This is another sign of the mounting challenges facing the Prime Minister shehbaz sharif as he struggles to revive a $6.7 billion IMF loan and avert a default amid an ongoing political crisis. The government has already seen demand suppressed after raising taxes and energy prices, and devalued the currency to comply with IMF demands.
The slowdown is largely due to a reduction in industrial production caused by government restrictions on the import of many raw materials, as it does not have the funds to make those purchases. Agricultural production has also plummeted because of last year’s floods, which submerged a third of the country and displaced millions.
“This is more a managed decline, or a decline by design,” said Mohammad Sohail, chief executive officer of Topline Securities Ltd. Keeping up has helped.
world Bank and the Asian Development Bank have both cut their growth projections for Pakistan. Last month, the ADB said it expected the economy to shrink from 6% to 0.6%. The World Bank’s latest assessment projects 0.4% for the current fiscal, adding that it is likely to “remain below potential in the medium term”.
Political tensions are adding to financial risks ahead of elections due in October, as former Prime Minister Imran Khan shows no signs of backing down in his campaign against the government and the powerful military. Investors are on edge in the impasse. Future financing options also look increasingly uncertain.
Topline’s Sohail said, “The first half of the financial year will be challenging as a new IMF deal is expected to take three to four months and then there will be some political stability after the elections, so things will start improving after December.”