KARACHI: Pakistan's central bank on Wednesday estimated economic growth to surge up to four per cent for the current fiscal year, surpassing forecasts by international agencies.

The State Bank of Pakistan (SBP) announced its forecast in its belated annual report reviewing the fiscal year ended June 30, 2013.

“SBP projects GDP growth in the range of three to four per cent for FY14 which is higher than the IMF's growth forecast of 2.5 to three per cent,” the bank said.

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 per cent, the bank said, and inflation fell to single digits.

But it warned inflation could rise as high as 11 per cent in the current fiscal.

Cash-strapped Pakistan, plagued by a bloody home-grown Taliban insurgency, is battling to get its shaky economy back on track and solve a chronic energy crisis that cripples industry.

Economists say growth needs to be seven per cent to absorb the country's booming population.