Pakistan cuts growth forecast, forex reserves fall

ISLAMABAD, May 25 (Reuters) – Pakistan cut its GDP growth estimate for fiscal year 2022-23 to 0.29%, from a previous estimate of 2%, the national accounts committee said, underscoring a contraction in growth. industrial. concern of an acute economic crisis.

The country’s growth was held back by the slowdown in the agricultural, industrial and service sectors, with growth estimated at 1.55%, -2.94% and 0.86%, respectively, the committee said in a statement on Wednesday night.

Pakistan’s fiscal year runs from July to June 30.

GDP growth for fiscal year 2021-22 was revised to 6.1%, from 5.97%, and the final figure for fiscal year 2020-21 was 5.77%, from 5.74% the committee said.

Hit by a natural disaster, an acute balance of payments crisis and the worst political turmoil in years, Pakistan has been trying to reach an agreement with the International Monetary Fund (IMF) to disburse a stagnant $1.1 billion of funds from a $6.5 billion bailout agreed in 2019.

A central bank statement said Thursday that Pakistan’s foreign reserves had fallen to $4.19 billion, barely enough to cover a month of controlled imports.

Hit last year by ravagers floods and the political chaos fanned by the elimination Under Imran Khan as prime minister, Pakistan’s $350 billion economy has slumped from growth of more than 6% in the past year.

The central bank said last week that GDP growth is likely to be significantly lower this year, compared to last year, even lower than its own. revised estimate of 2%.

Pakistan published its highest ever inflation rate of 36.4% in April and its currency has depreciated to a record low as part of the IMF’s conditions to align it with a market-based exchange rate.

The committee’s latest GDP growth estimate for this fiscal year is below the World Bank estimate of 0.4%, while the the IMF said in April that growth would be 0.5%.

Reporting by Asif Shahzad, written by Tanvi Mehta; Edited by Muralikumar Anantharaman, Simon Cameron-Moore and Alexander Smith

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