Bloomberg’s Report on Pakistan’s Economy Gives A Gloomy Picture
Bloomberg’s Report on Pakistan’s Economy Gives A Gloomy Picture: Bloomberg reported that Pakistan’s retiring government expects the economy will cultivate at the fastest pace in more than a decade in the coming fiscal year, but the economists are doubtful.
Standard Chartered Plc, Elixir Securities Pakistan Pvt. and BMA Capital Management Ltd. are among those that have downgraded growth forecasts, staking on a slowdown for the first time in 6 years.
Growth in South Asia’s second-largest economy is set to decrease to 5.2% in the year and this projected slowdown comes as the government scales back plans for spending on roads and infrastructure to meet fiscal targets
“Pakistan’s economy can’t grow faster anymore with the external imbalances,” said Hamad Aslam, research director at Elixir Securities Pakistan Pvt. There is also “increased conviction on Pakistan entering an IMF program later this year that will focus on controlling the deficit over growth.” stated the report.
Economy from Bad To Worse
The economy has gone from bad to worse before elections.
- The nation’s dollar reserves have dropped at the fastest pace in Asia and its current-account deficit widened 50% this year.
- Authorities have also devalued the currency twice since December.
- There are risks to consumer and investor sentiment from the growing current account gap.
- Tighter monetary and fiscal policy and a weaker rupee are needed to narrow that gap.
- The benchmark KSE 100 Index has dropped 6 percent since its peak in April as economic pressures build up ahead of elections.
- The stock market was the worst performer globally last year, according to 95 indexes tracked by Bloomberg.
In the budget announced last month, the government slashed development spending by 20% to Rs. 800 billion ($6.92 billion). Fixed investment demand by the private sector dropped 6%t to Rs.148 billion in the eight months ended February, according to government data.
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