SBP’s projections

THE State Bank Governor’s Annual Report for FY2023 is “cautiously optimistic” about the economy. It projects headline price inflation to drop, the current account deficit to narrow, and GDP to expand during the ongoing fiscal year. However, the report warns, this outlook hinges on the absence of adverse shocks stemming from geopolitical tensions, unforeseen climate events and unfavourable movements in global commodity prices. That aside, the bank expects inflation to slow down to 20pc-22pc, the current account gap to narrow to 0.5pc-1.5pc of GDP, and the economy to grow by 2pc-3pc. The projected recovery is modest but still a source of comfort after a tumultuous year in which Pakistan barely avoided default. “The economic landscape of Pakistan has faced unprecedented challenges throughout the fiscal year,” the report notes, highlighting that political uncertainty was another factor impacting business and consumer sentiments, thus affecting economic activity.