The GDP of Pakistan grew by 0.29% (provisional) in the FY 2023 despite several difficulties brought on by an unstable external and internal economic environment.
According to the Ministry of Finance, lower foreign exchange inflows over the year kept the pressure on external payments high.
The Ministry of Finance’s monthly Economic Update and Outlook for May 2023 revealed that the economy of Pakistan grew by 0.29% (provisional) in the FY 2023 despite several difficulties brought on by an unstable external and internal economic environment.
Moreover, these difficulties caused CPI inflation to continue on a higher trajectory despite monetary tightening, particularly as a result of the devaluation of the Pakistani rupee (PKR). Additionally, the study noted that external payments were still burdened as a result of lower foreign exchange inflows.
The report further said that the government’s decision to implement fiscal austerity during the previous year has supported the viability of the economy. Economic development will benefit from the restoration of agricultural activity during the Kharif season. Overall, prosperity, economic expansion, and enhanced supply chains are anticipated to result from the right policy mix.
Inflationary pressure in May 2023 is anticipated to stay the same as it did in April, the report stated.
In April 2023, the CPI increased by 36.4 percent on an annual basis, compared to a rise of 35.4 percent the month before.
Flood damage, supply chain interruptions, devaluation driven on by macroeconomic imbalances, and political ambiguity are possible causes of the rising price level.
As per the estimate, inflation for the month of May 2023 may stay between 34 and 36 percent.
In April, it showed an increase every month by 2.4% compared to the previous month’s gain of 3.7%. The CPI inflation rate was 11.0% from July through April of FY2023, on average, compared to 28.2% this year.
In addition, from July through April of FY2023, the provisional net tax collection increased by 16.1% to Rs. 5637.9 billion from Rs. 4,855.8 billion during the same period in FY2022. In April 2023, it increased to Rs. 482 billion, up 0.4% from Rs. 480 billion in the same month the previous year.