(Reuters) – Pakistan’s economic outlook for next year is positive, with growth targeted at 3.6 percent and inflation expected to ease to 12 percent, the Planning Ministry said on Friday.
Pakistan will present its annual budget on June 10, three days later than scheduled, as markets await details of a plan seen as crucial to securing a new loan from the International Monetary Fund, two government sources said on Friday. Pakistan’s fiscal year starts on July 1.
“Growth prospects depend on political stability, exchange rate, macroeconomic stabilization resulting from the IMF program, and projected declines in global oil and commodity prices,” the ministry said in its annual plan review.
The State Bank of Pakistan said in its semi-annual report earlier this month that despite a slight improvement in macroeconomic indicators, the economy was grappling with structural bottlenecks exacerbated by political uncertainty. It projected real GDP growth of 2-3% for fiscal 2024.
The Planning Ministry said fiscal consolidation measures will reduce the fiscal deficit and the average inflation rate in the country is likely to ease to 12 percent due to lower global inflation.
Pakistan’s inflation rate was 13.5-14.5 percent in May and is expected to ease further to 12.5-13.5 percent by June, the Finance Ministry said in its monthly report on Wednesday.
Pakistan has been struggling with inflation above 20% since May 2022 and hit a high of 38% in May 2023 as it pushes through reforms as part of an International Monetary Fund rescue program, but inflation has been slowing in the past few months.
The Planning Ministry added that the Annual Planning Coordination Committee had approved an estimated 1.22 trillion rupees ($4.39 billion) for public sector development spending in the next fiscal year, lower than the 2.8 trillion rupees ($10 billion) requested by ministries and agencies due to fiscal constraints.
(1 dollar = 278.1000 Pakistani rupees)
(Reporting by Asif Shahzad in Islamabad; Writing by Ariba Shahid in Karachi; Editing by Alison Williams and Kevin Liffey)
