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Pakistan’s Economy to Expand by 2-2.5% This Year

Dr. Shamshad Predicts Pakistan’s Economy to Expand by 2-2.5% This Year

Dr. Shamshad Akhtar, Pakistan’s Caretaker Finance Minister, has projected a 2-2.5% growth for the country’s economy in the current fiscal year. Speaking via video link at the IPO Summit-2024 in Karachi, Dr. Akhtar highlighted significant macroeconomic progress, with agriculture and industry expected to grow by 5.6% and 2.5%, respectively. Despite challenges in implementing further reforms at the Federal Board of Revenue (FBR), she anticipates tax collections to reach Rs10 trillion. The government’s austerity measures have led to a primary surplus and a turnaround in the current account deficit, now showing a surplus. However, Dr. Akhtar emphasized the need for manageable fiscal and current accounts to reduce interest rates, noting that high rates hinder capital market growth.On the external front, Dr. Akhtar reported that foreign exchange reserves have increased to $9.1 billion, bolstered by the IMF’s second tranche and multilateral flows. This improvement, she believes, lays the foundation for attracting future foreign investments. Dr. Akhtar also observed a boost in business confidence and market sentiment, evidenced by the Pakistan Stock Exchange’s bullish performance and rising foreign portfolio inflows.Addressing the global financial landscape, Dr. Akhtar remarked on the post-Covid shift in IPO trends, with the Asia Pacific region, led by China, Japan, and Southeast Asia, overtaking North America. She stressed the importance of moving away from traditional bank-driven financing towards transparent, governance-focused capital markets to counter stifling private credit issues.