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Belated annual report warns inflation could rise to 11 percent in current fiscal year.
The State Bank of Pakistan (SBP) on Wednesday estimated economic growth for the current fiscal year of up to four percent, surpassing forecasts by international agencies.
Announcing its forecast in a belated annual report reviewing the fiscal year ended June 30, 2013, the SBP said: “SBP projects GDP growth in the range of 3-4 percent for FY14 which is higher than the IMF’s growth forecast of 2.5 to three percent.”
The International Monetary Fund (IMF) approved a $6.7 billion loan package for Pakistan in September last year, subject to strict economic reforms, particularly in its troubled energy sector and tax system. The central bank forecast that the three-year deal should bring stability to the domestic foreign exchange market during the current fiscal year.
In the last fiscal year Pakistan’s economy grew at 3.6 percent, the bank said, and inflation fell to single digits. But it warned inflation could rise as high as 11 percent in the current fiscal.
Economists say growth needs to be seven percent to absorb the country’s booming population.