Pakistan GDP Stands at $313b

The size of Pakistan’s economy stood at $313.13 billion at the end of June 2018, according to provisional figures released on Thursday by the central bank, as a weaker currency took toll on gross domestic product in dollar terms.

Pakistan’s GDP stood at $304.97 billion at the end of June 2017, and the economy registered a 13-year high GDP growth rate of 5.8% in FY18. The size of the economy shrunk in dollar terms as the rupee weakened against the greenback in four separate rounds since December 2017, with a 5.8% growth rate effectively reduced to 2.7%, APP reported.

The State Bank of Pakistan used a period average month-to-month exchange rate to calculate the GDP, which according to calculations came to around Rs108 to the dollar.  With the rupee having weakened further, the size of the economy is likely to have shrunk even more in dollar terms. The currency is currently hovering around the Rs128-mark as depleting foreign exchange reserves and a widening current account deficit create a headache for economic managers that are at a loss to save the country from a balance of payments crisis.

The SBP has already increased the key interest rate by 175 basis points since January, taking it to 7.5% to tackle increasing inflationary pressure in the months to come.

Additionally, the 5.8% growth registered during FY18 is also not enough for a developing economy like Pakistan to absorb the number of job seekers that pile up each year.

According to experts and global financial institutions, Pakistan needs at least 7% growth to create enough jobs and tame rising unemployment.