Pakistan can achieve 6 pc real GDP growth: Central Bank

By Muhammad Luqman
The economic activity in Pakistan continues to be strong enough to help achieve 6 percent of GDP growth during the current fiscal year, according to State Bank of Pakistan.
“Broad-based pick up in industrial output, gains in factors supporting production of major crops, and growth in private sector credit are contributing to this end,” Central Bank in its bi-monthly monetary policy statement said.
State Bank has decided to maintain the policy rate at 5.75 percent for the months of November and December.
Model-based projections for inflation and survey-based measures of inflation expectations show that in FY18 overall inflation is expected to remain well below the target of 6.0 percent.
On the fiscal front, the statement continued, healthy growth in tax revenue collection by FBR during Q1-FY18, 22.0 percent compared to the modest 4.5 percent during Q1-FY17, is a welcome development.
Near-term balance-of-payments challenges continue to persist. However, visible improvements in export growth, notable increase in foreign direct investments and expected other financial inflows will help contain these pressures.
On the real sector , the central bank said, during Q1-FY18 LSM growth has surpassed its earlier expectations as it has been recorded at 8.4 percent compared to 1.8 percent in the corresponding period of FY17.
This is explained by improved security conditions and power supply, transformation of fixed investment into enhancements of productive capacity on the ground, low inflation and stable interest rates. Further support comes from the continuation of CPEC projects.
Barring any extreme seasonal events, agriculture sector is expected to perform better for the second consecutive year. This is explained by increase in both cultivated area and fertilizer off-take during the Kharif season, on-going trend of investment in mechanization, higher uptick in agricultural credit and unchanged support price for wheat at the time of its sowing.