Federal Finance Minister Miftah Ismail expects the economy to grow more than 3.5% for the ongoing fiscal year, down from an initial target of 5%, Bloomberg News reported on Saturday.
Miftah predicted inflation, running at the highest in 47 years and the second-highest in Asia, was close to its peak and would average 15% for the year, the report added.
Curbs on luxury items may remain in place for longer than currently anticipated, the minister was quoted as saying.
Miftah aims to spur the country's growth by avoiding unchecked imports of everything from home appliances to cosmetics and the resultant chronic shortage of dollars.
Read: Imports will be limited for three more months: Miftah
The minister said he wanted to break a “boom-and-bust cycle” that had played out for decades, and help the nation to finally learn to live within its means.
The outlook has been further complicated in the aftermath of historic floods, which could have an economic impact of at least $10 billion, adding to a list of problems for Miftah that includes political turmoil and raging inflation.
Less than a week ago, the International Monetary Fund (IMF) gave Pakistan a $1.16 billion lifeline to avoid imminent default.
The country also secured pledges for a total of $9 billion in investments and loans from Qatar, Saudi Arabia, and the UAE.
Miftah said he expected a $1 billion investment in listed state-owned companies to materialise in about a month.
Since taking up his post in April, Miftah has made efforts to narrow Pakistan’s yawning trade gap and current account deficit a priority.
Pakistan’s imports need to be equal to the dollar inflow from exports and from remittances provided by citizens living abroad, according to the minister.
Read: Miftah assures economic crisis 'averted'
Pakistan’s export revenue is dominated by textiles, and much of its cotton crop was washed away. The government will allow the textile industry to import as much cotton as it needs to keep the looms running.
Islamabad is now also importing tomatoes and onions from Afghanistan, Iran and Turkey after shortages shot prices higher.
“If I have limited dollars, I will absolutely make sure that I use them to buy wheat, I use them to buy edible things for our people,” said the minister. “Maybe we can delay buying Audis and Mercedes,” he added.
Last week, while addressing the ‘Leaders in Islamabad Business Summit’, Miftah had highlighted that self-reliance, export promotion, farm productivity enhancement and education of children were the four basic principles to lead the country towards growth and development.
“Pakistan is not where it should have been, according to the vision of Quaid-e-Azam Muhammad Ali Jinnah,” he had said.
There is a dire need to identify the mistakes that affected Pakistan’s progress as compared [with] other countries,” Miftah had added. (With additional input from Reuters)
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