GDP expected to slow down to 5% in FY23: APCC

June 06, 2022 (MLN): The federal government has set a 5% GDP growth target for the next financial year starting on July 1, slightly less than the current year’s provisional estimate of 5.97% due to fiscal and external sector imbalances.

The Annual Plan Coordination Committee (APCC), headed by Planning Minister Ahsan Iqbal, has set a current account deficit target of 2.2% of GDP or more than $10 billion for the fiscal year 2022-23.

In the outgoing fiscal year, the current account deficit is estimated at $16 billion, or 4.1% of GDP.

The APCC approved the growth target for the agriculture sector at 3.9%, manufacturing at 7.1% and services at 5.1%.

The provisional growth of agricultural, industrial and services sectors is 4.40%, 7.19% and 6.19% respectively in the outgoing fiscal year

The Coordination Committee the average inflation target at 11.5% for the fiscal year 2022-23. The resumption of the IMF program will likely increase inflationary pressure as the government has started increasing fuel prices and electricity tariffs which are the main conditionalities for the stalled bailout package.

The APCC approved the investment target of 14.7% of GDP while national savings at 12.6% of GDP.

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