GDP expected to grow 2.6% in FY24 as agriculture, industry efficiency improves: FM

April 23, 2024 (MLN): The government's efforts directed towards stabilizing the economy is expected to contribute to a projected GDP growth of 2.6% for the fiscal year 2024, Finance Minister Muhammad Aurangzeb stated while addressing the Islamabad Business Summit 2024 on the theme "Collaborating for Growth".

The Finance Minister said that the efficiency of agriculture and industry is expected to improve.

Noting the significant slowdown in inflation, he said that consumer prices are expected to rise 24% in FY24 as compared to 29.2% in the previous fiscal year.

The Consumer Price Index (CPI) has decreased to 20.7% YoY in March 2024, from 35.4% in the same month last year. The government is actively working to alleviate inflationary pressures and support the economically weaker sections of society.

To contain inflationary pressures, the State Bank has kept the policy rate unchanged at 22% from June 2023, Aurangzeb said.

Moreover, the current account and fiscal deficits are expected to remain within sustainable limits.

To note, in March 2024, Pakistan’s current account posted the highest monthly current account surplus of $619 million in 9 years, which was largely due to a significant inflow of workers’ remittances.

On a cumulative basis, the current account deficit in 9MFY24 was recorded at $508m, showing an improvement of 87.5% YoY when compared to the deficit of $4.05bn in 9MFY23.

Aurangzeb stated that the government has taken measures to improve the efficiency of the agricultural sector.

Exceptional production of major crops has been reported, alongside a significant 33.6% increase in agricultural credit disbursement July-February 2024.

These developments are poised to positively impact the industrial sector.

Foreign exchange reserves increased to $13.3 billion as on April 16, 2024 from $9.7 billion in June FY2023.

Last week, the reserves held above $13.3bn level despite a repayment of $1bn Euro Bond.

The government is promoting the development of the agriculture and industrial sectors through various initiatives, including solarization, youth entrepreneurship, IT sector promotion, SMEs, investment export facilitation, and industrial production.

Furthermore, steps are being taken to attract foreign investment and accelerate economic growth, with a positive economic outlook bolstered by active government initiatives and enhanced coordination with development partners.

The government has set targets to keep current account deficit and fiscal deficit within reasonable limits.

Tax collection has increased on the back of government measures, Federal Board of Revenue's (FBR) tax collection increased by 30.2% during July-March 2024, achieving the target of Rs6.71 trillion.

Ministry of Finance in collaboration with the Federal Board of Revenue (FBR) and Ministry of Law is actively working on measures to bolster revenue.

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