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SBP projects GDP growth to remain between at 3-4%



  • SBP says economy will grow at slower pace.
  • Economy had expanded by 6% during last fiscal year. 
  • SBP had already cut the economic growth to about 2%.

KARACHI: The State Bank of Pakistan (SBP) on Wednesday projected that Pakistan’s economy will grow at a slower pace in the ongoing fiscal year compared to what was predicted a few months ago due to the catastrophic flood losses and falling demand, and as high interest rates, reported The News.

“Taking into account the destruction caused by floods and the policy focus on stabilisation, the SBP projects real GDP [Gross Domestic Product] growth below the previously announced range of 3-4% for FY-2023,” said the central bank in its annual report on the State of Pakistan’s Economy for the fiscal year 2021/22.

The economy had expanded by 6% during the last fiscal year. The SBP had already cut the economic growth to about 2% in its monetary policy statement in October.

The SBP’s growth projection was not only based on flood-related fallout on the economy, which is anticipated to affect the real economic activity through a variety of channels and have a considerable negative impact on output.

The country’s economy was given dim predictions by international financial institutions as well. The World Bank predicts that this fiscal year’s GDP growth would be 2.2%. The country’s GDP was projected by the International Monetary Fund to grow by 3.5% without taking the impacts of the floods into account.

The central bank’s economic report card for FY-2022 was released amid a balance of payments crisis. 

Pakistan severely needs external financing while the IMF’s ninth review has been pending since September. The forex reserves have fallen to $6.7 billion, hardly enough for a month’s worth of imports.

On inflation, the central bank has projected that the prices would go beyond the previously announced range of 18-20% during the ongoing fiscal. The consumer price index inflation is expected to be in the 21-23 range, according to its last monetary policy statement.

“Supply shocks in the form of the rollback of energy subsidies and resumption of fuel taxation and losses to agriculture produce caused by floods are likely to influence the inflation trajectory during the year. The elimination of subsidies and increase in fuel taxation triggered a sharp increase in inflation since June 2022, and the trend is likely to persist in FY2023,” it said in the report.

The coordinated fiscal and monetary policy stance is likely to reduce external account pressures in FY2023. 

The SBP sees the current account deficit to be around 3% of GDP. This improvement would be driven by a sizeable contraction in import growth. 

Likewise, global commodity prices have also started to soften after reaching multiyear peaks in FY-2022, which will reduce the pressure caused by a large price impact, it said.

However, the downturn in global demand may also weaken the growth of exports, and the tightening of policies in advanced economies would lessen the likelihood of capital flows to emerging and developing economies.

After seeing a surge in FY-2021, the workers’ remittances seem to have peaked in FY-2022 and are probably going to stay at a similar level in FY-2023, it noted.

“Alongside the IMF programme disbursements, the country is expected to receive external financing from multilateral and bilateral creditors that will considerably strengthen FX reserves position during FY2023.”


In a first for history, PSX crosses the 77,000 milestone.




At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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Pakistan currently has $14.38 billion in foreign exchange reserves.




Pakistan’s commercial banks’ reserves, which stood at $5.28 billion at the conclusion of the week ending on June 7, rose by US$174 million, according to a central bank statement.

Reserving US$6.2 million less, the SBP now has US$9.10 billion in reserves. The causes for the decline in the reserves it had were not disclosed by the central bank.

The SBP released a statement that stated, “SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on 07-June-2024.”

The State Bank of Pakistan’s (SBP) foreign exchange reserves were reduced by US$ 63 million as a result of repaying external debt, with the reserves standing at US$ 9.093 billion as of earlier on June 6.

The central bank spokesperson said in a statement that as of the week that concluded on May 31, the nation’s total liquid foreign reserves were $14.31 billion.

In terms of net foreign reserves, commercial banks have US$ 5.22 billion of the overall foreign reserves, according to the SBP.

SBP reserves dropped by US$ 63 million to US$ 9,093.7 million during the week that ended on May 24, 2024, according to the announcement.

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In the local market, the price of gold plummets to Rs240,700/tola.




Gold with a 24-karat purity level has dropped by Rs1200/tola on the local market.

Each tola of 24-karat gold is now selling for Rs240,700, with a further drop of Rs1029 bringing the price of 10 kilos of gold to Rs206,361. These figures are courtesy of the All Sarafa and Jewelers Association.

Meanwhile, after a $2 decline on the global market, one ounce of gold will be valued $2315.

A tola of gold was worth Rs 600 more on Wednesday.

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