SBP slashes GDP growth forecast to below 3-4pc

The central bank has lowered its projected GDP growth from the previously announced range of 3-4 per cent for the current fiscal year, citing flood-induced destruction and the stabilisation policy as major factors in its flagship economic health report released on Wednesday. However, in its Annual Report on the State of Pakistan’s Economy, which mostly discussed the previous financial year that ended on June 30, the State Bank of Pakistan (SBP) said economic growth was stronger than expected in the 2021-22 fiscal year as real GDP increased by 6pc compared to 5.7pc a year ago. The primary drivers of this growth were a broad-based expansion in large-scale manufacturing (LSM) and improved agricultural output, the report said. “A combination of adverse global and domestic developments led to the re-emergence of macroeconomic imbalances during FY22,” it said. Cuts FY23 outlook after considering flood-induced destruction, policy focus on stabilisation The SBP said that the economy was already in a stabilisation phase when widespread flooding hit a large part of the country at the start of the current fiscal year.