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Pakistan May Miss Growth Target

Agriculture growth is likely to remain lower than last year.Agriculture growth is likely to remain lower than last year.

Pakistan is in danger of missing its 6% growth target in 2018 due to the poor performance of the agriculture sector that expected to grow at a more tepid pace than projected amid bad cotton crop and less wheat cultivation this season, the central bank said.

“Agriculture growth is likely to remain lower than last year, as well as the target set for FY18,” the State Bank of Pakistan said in its quarterly report on the state of the country’s economy, APP reported.

“This assessment is primarily based on an expected shortfall of 2.5 million bales in cotton production, as well as below-target area under wheat cultivation. In this context GDP growth is likely to remain slightly below the target of 6% percent.”

The bank said the growth outlook is strong but “risks to overall macroeconomic stability have increased due to widening imbalances in country’s balance of payments”. The real sector of the economy was performing well, the external account presented challenges.

The central bank was a bit more optimistic on its 2017/18 exports forecast, saying a strong demand in international markets, currency depreciation and state incentives would result in $24.1 billion to $24.6 billion export revenue in the current fiscal year, up from the projected $23 to $24 billion two months back. The government has fixed a $23.1 billion export target for FY18.

 “Following a healthy 16.4% growth in the month of February, the cumulative export growth in July-Feb FY18 has reached 11.7%. If exports continue to grow at the same pace for the remaining months, the target of $23.1 billion can comfortably be surpassed.”

However, the State Bank warned that higher domestic fuel prices could drive up inflation in the coming months.

 

 

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