Pakistan economy grows beyond targets

Inflation swelled to 8.1 per cent in first quarter compared with 5.6 per cent in the corresponding period last year.

Pakistan recorded five per cent growth in the first quarter of the current fiscal year, the central bank said Friday, beating its target and almost doubling the figure for the same period last year.

The State Bank of Pakistan data for the early months of the financial year began in July, 2013 said GDP grew by 5.0 per cent, compared with only 2.9 per cent in the first quarter of the last fiscal year.

Nuclear-armed Pakistan, plagued by insurgency and chronic power shortages, has struggled to energise its economy in recent years.

Growth has bumped along well below the level experts say is needed to absorb new entrants to the workforce from Pakistan's growing, youthful population.

"Since the macroeconomic indicators were favourable at the start of the year, the increase in real GDP growth in fiscal year 2014 was discernible," the bank said.

Pakistan's economists had set a growth target for the current financial year of 4.4 per cent, and the central bank in earlier reports had forecast growth of four per cent.

The upbeat first quarter performance came on the back of good performances by the industrial and services sectors, the report said.

However the bank warned that inflation swelled to 8.1 per cent in the first quarter compared with 5.6 per cent in the corresponding period last year.

The IMF approved a $6.7 billion bailout loan package for Pakistan in September last year to help the country achieve economic reforms, particularly in its troubled energy sector.

The fund also observed that Pakistan's economy was picking up.