Pakistan likely to miss GDP growth target for fiscal year 2013-14

Published: January 15, 2014
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Pakistan’s economy grew at 3.6 per cent and inflation fell to single-digit in Fiscal Year 2013. PHOTO: FILE

Pakistan’s economy grew at 3.6 per cent and inflation fell to single-digit in Fiscal Year 2013. PHOTO: FILE

KARACHI: The State Bank of Pakistan (SBP) said on Wednesday that the growth rate for gross domestic product (GDP) will remain below target in the current fiscal year after the budget deficit doubled for fiscal year 2012-2013.

In its annual report on the state of the economy for 2012-13 released on Wednesday, the SBP said real GDP growth rate in fiscal 2014 is likely to remain between 3%-4%. In contrast, the annual plan for fiscal 2014 sets a GDP growth rate target of 4.4%.

According to the State Bank’s Annual Report on the State of Economy for the year 2012-13 released on Wednesday, Pakistan’s economy grew at 3.6 per cent and inflation fell to single-digit in Fiscal Year 2013.

The report noted that the soft global commodity prices, downward revision in energy prices and a relatively stable exchange rate allowed the average inflation rate to fall to 7.4 per cent in FY13, which was much lower than the 9.5 per cent target for the year.

“In a repeat from the previous year, the budget deficit exceeded the target for FY13 by a wide margin, as the realised deficit was 8.0 per cent of GDP, against a target of 4.7 per cent,” said the report. For the third consecutive year, the energy sector was addressed by paying off the circular debt, which pushed the fiscal deficits above the respective targets for these years.

According to the report, SBP projected that the GDP would grow in the range of 3.0 – 4.0 per cent fiscal year 2013-14, which is higher than the IMF’s growth forecast of 2.5 – 3.0 per cent.

Inflation outlook, based on October 2013 data, was in the range of 10.5 to 11.5 per cent, a more realistic outlook based on latest data shows average inflation for FY14 to remain between 10 and 11 per cent.

The International Monetary Fund (IMF) gave a brief reaction to the SBP report. In a tweet from their Pakistan specific Twitter account, the financial institution noted that projected growth between 3-4% was good considering the challenges faced. However, it added that more was still needed to be done.

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Reader Comments (13)

  • Iftikhar
    Jan 15, 2014 - 9:15PM

    Munshi Sahib has been saying for the past 3 months of double digit growth until he got a shut up call by IMF official. His job is not to turn around the economy but to make stench look like fragrance. Recommend

  • Sodomite
    Jan 15, 2014 - 9:15PM

    I argued that this would happen in my post budget commentary. But Minister Dar had charmed the pants off the media as if a Messiah had come down to show us the Magic Kingdom. We have now met reality of this fake Messiah’s pronouncements. It’s time to come out on to the streets Comrades to tear off these chains and put them on the corrupt lot in Islamabad and Rawalpindi. Recommend

  • yousafhaque
    Jan 15, 2014 - 9:38PM

    Since ’47 which year did we not miss gdp growth target.In case someone is desirous of pointing at any year (where we so muchas equalled the set growth target in annual budget) please be warned this issue is very serious and concerns over 180 million livesRecommend

  • Zeshan
    Jan 15, 2014 - 9:46PM

    But Mr. Dar and many PMLN reps on talk shows are quoting 5.2% GDP.
    When in reality, the GDP is 2.8-3.0%.
    PMLN failing in all sectors.
    Sher aya sher!Recommend

  • KB
    Jan 15, 2014 - 10:01PM

    Tell me something new!Recommend

  • hamza khan
    Jan 15, 2014 - 10:04PM

    musharraf anyone?Recommend

  • Mohammed
    Jan 15, 2014 - 10:15PM

    What happened to the 5% that was so proudly announced by the PML a few weeks ago. Did they steal the extra % like they do with everything else?Recommend

  • Dhaka
    Jan 15, 2014 - 10:24PM

    Now we are approaching very fast to overtake pakistan on economy and militarilyRecommend

  • BridgeSeller
    Jan 15, 2014 - 10:31PM

    color me surprised!Recommend

  • Dhaka
    Jan 15, 2014 - 11:14PM

    The problem of pakistan is that there country does not have any resources,infrastructure, business house or talent to grow in high gdp targets.There politicians and business community have to learn lot from us.Recommend

  • Ahmed
    Jan 15, 2014 - 11:19PM

    @Dhaka:
    Pease do not under estimate us.We are also catching up fast with bangadesh.We may not as good as in infrastructures compared to your country.Neither our capital is as big as yours.But still we are growing.Recommend

  • Affan
    Jan 15, 2014 - 11:31PM

    I love you dhaka… ur funnyRecommend

  • Jun 2, 2014 - 6:07PM

    @Dhaka:

    lol … have you seen yours..

    Recommend

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