1
KARACHI: Pakistan's Finance Ministry said on Tuesday an economic growth target had been revised down to 2.4 per cent for the 2010/11 (July-June) fiscal year, compared with an original target of 4.5 per cent.
The GDP growth target was lowered to 2.5 per cent following floods last year, which caused about $10 billion in damage. The central bank has projected GDP growth to be between two and three per cent for the year ending on June 30. GDP growth was 4.1 per cent in fiscal year 2009/10.
The new figure was published after a meeting of the Monetary and Fiscal Coordination Board, which also included the country's finance minister and the governor of the State Bank of Pakistan (SBP).
According to finance officials last month, the economy is expected to grow by four per cent in the 2011/12 fiscal year. This is expected to be announced when the budget for the new fiscal year, starting on July 1, is unveiled on May 28. The central bank governor also said inflationary pressure persisted because of rising international oil and commodity prices and continued government borrowing from the central bank. Pakistan's CPI rose 13.04 per cent in April from a year ago, and was up 1.62 per cent from March.
“He cautioned that going forward (budget) deficit should be brought down and reliance on SBP borrowing be further reduced,” the Finance Ministry said in a statement. Pakistan's budget deficit for the first nine months of the 2010/11 fiscal year (July-June) was 4.5 per cent of gross domestic product, the ministry said on its web site (www.finance.gov.pk).
Pakistan said in March it aimed to keep the budget deficit to less than 5.5 per cent of GDP for this fiscal year. The International Monetary Fund (IMF) and Pakistan have agreed to a target of 5.3 per cent of GDP, according to officials involved in negotiations, a target likely to be overshot according to analysts.
The IMF and Pakistan are due to meet in Dubai on May 11-17 to discuss budget targets for the 2011/12 fiscal year and the next tranche of an $11 billion bailout loan.
