Pakistan's Economy Faces Inflation in the Range of 27%-29% This Month: Government Report
Global food price trends, currency exchange rates, and policy rate changes are also addressed in the report. Business news in Pakistan indicates a mixed economic landscape with both opportunities and challenges.
Karobar
In a recent monthly economic update outlook report, the Ministry of Finance unveils encouraging economic results emerging in the first quarter of the current financial year. Here's a comprehensive overview of the report's key findings:
The report anticipates that inflation is poised to fluctuate between 27% and 29% for the ongoing month. This relatively subdued inflation is attributed to the declining prices of petrol and diesel, as well as the rupee's appreciation.
Tax Collection:
The Federal Board of Revenue exhibited a noteworthy performance, witnessing a 25% increase in tax collection, with a total of Rs2,042 billion amassed.
One of the major challenges to financial stability highlighted in the report is the escalating interest rates on loans.
Non-Tax Revenue Surge:
Non-tax revenue surged by a substantial 114.7%, accumulating Rs453 billion over three months. On the flip side, the fiscal deficit expanded by 17.6%, reaching Rs963 billion.
Current Account Deficit and Foreign Investment:
The report notes a remarkable 58% reduction in the current account deficit, settling at $900 million between July and September. The same period also saw a boost in foreign direct investment, totaling $402.3 million.
Agriculture and Manufacturing:
Cotton production enjoyed a staggering 126% increase, while large-scale manufacturing inched up by 0.5%. Agricultural loans disbursed grew by 30%, amounting to Rs499 billion.
Remittances and Exports:
Remittances, however, took a dip of 19.8%, reaching $6.3 billion. Exports experienced a decline of 5%, standing at $7 billion.
Imports:
Imports amounted to $12.5 billion from July to September, following a 23.8% decrease, as reported by the ministry.
Economic Growth and Stability:
Despite the challenges, accelerated economic activities indicate a positive outlook for economic growth in the ongoing financial year. This growth is expected to be sustainable, thanks to ongoing efforts to address macroeconomic imbalances.
Global Food Prices:
The report also mentions a global decline in food prices, including dairy products, edible oil, and meat. However, certain commodities, such as sugar and cereals, experienced price increases.
Currency and Policy Rate:
The US Dollar witnessed a significant rise, climbing from Rs220 to Rs279, an increase of Rs77. Additionally, the policy rate surged from 15% to a high of 22% within a year.
