Pakistan trapped in the vortex of economic crisis, 'neighbor' upset by a high inflation rate and increasing deficit

Business News Desk – Pakistan’s economy faces serious economic challenges. Inflation in the country is expected to be at a high level of 21-23 percent. At the same time, the country’s fiscal deficit increased by more than 115 percent in the first four months (July-October) of the country facing cash crisis. According to a report from Don newspaper, the Ministry of Finance of Pakistan in its monthly economic update and prospects said that economic growth in the financial year 2023 is likely to be less than the budget goal due to flooding. The ministry said on Friday: ‘Low growth, high inflation and low levels of official foreign exchange reserves are the biggest challenges for policy makers. According to the MOF report, the total GDP for fiscal deficit was 1.5 percent (Rs 1.266 lakh crore) during July-October 2022-23, compared to 0.9 percent (Rs 587 billion) of GDP last year. High spending increase due to high pay payments has increased the fiscal slippery. The government also has an unprecedented challenge to relieve people in the flood -focused areas. The report said that the average consumer price index (CPI) was 25.1 percent for the first five months (July-November) of FY 20 (CPI), compared to 9.3 percent in the same period last year. According to the report, the inflation on consumer price index is expected to be within 21 to 23 percent. The current account deficit in FY 2023-23 stood at $ 3.1 billion last year at a loss of $ 7.2 billion. The current account deficit (CAD) was reduced by $ 569 million in October to $ 276 million in November. Talk about the industrial sector, the Ministry of Finance of Pakistan also accepted the decline. The industrial activity measured by a large -scale manufacturing index (LSM) output was slightly lower than expected in October, reported by the newspaper. The region was most affected by external conditions. The situation on the LSM above is attributed to several factors. First, the weighted average cyclical production difference between Pakistan’s most important trading partners in the negative area was gradually increasing. This is mainly due to a decline in world question. The second reason for this is that the loss of loss of agricultural production through floods began to affect the industrial areas. The third reason is that Pakistan’s official foreign exchange reserves are at a relatively low level, which requires restrictive monetary policies and other measures to limit imports. Share this story