Ministry of Finance remains optimistic, noting that the economy showed stable recovery in the first quarter, largely bolstered by the disbursement of $1.03 billion from the IMF
By our correspondent
ISLAMABAD: Pakistan’s inflation rate has hit its lowest mark in three and a half years, with September figures reflecting a substantial decline to 6.9 percent, the lowest level recorded in 44 months. This significant drop signals a potential turning point for the country’s economy, as outlined in the latest Economic Outlook report released by the Ministry of Finance. The report highlights a noteworthy surge in remittances, exports, imports, and foreign investment, painting a picture of gradual recovery amid previous economic challenges.
A remarkable 92.1 percent reduction in the current account deficit further underscores this positive trend, indicating improved fiscal stability. From July to September, the Federal Board of Revenue (FBR) reported a robust tax collection increase of 25.5 percent, alongside a notable rise in non-tax revenue, which climbed by 20.8 percent during the same period. Although the inflation rate has plummeted from a staggering 29 percent to a more manageable 9.2 percent, the report does reveal a slight dip in production within major industries, which decreased by 0.19 percent over the last two months.
Nevertheless, the Ministry of Finance remains optimistic, noting that the economy showed stable recovery in the first quarter, largely bolstered by the disbursement of $1.03 billion from the International Monetary Fund (IMF). Additionally, the recent Shanghai Cooperation Organization (SCO) conference appears to have played a role in enhancing business and market confidence. Looking to the future, the report conveys a sense of cautious optimism, suggesting that the economy is on a sustainable recovery trajectory. Remittances, for instance, surged by an impressive 38.8 percent, totaling $8.78 billion, while exports increased by 7.8 percent, amounting to $7.49 billion.
Foreign investment during this review period saw an extraordinary jump of 70.4 percent, exceeding $900 million, with foreign direct investment itself rising by 48 percent to reach $770 million. The State Bank of Pakistan has also reported a rise in foreign exchange reserves, climbing from $7.61 billion to over $11 billion. The stock market has responded positively, with an impressive gain of 78.4 percent, crossing the 90,000 points mark, while the Pakistani rupee has appreciated against the dollar, decreasing from 280.29 to 277.62 rupees over the past year.
Despite the fiscal deficit rising by 4.3 percent and exceeding PKR 841 billion in the initial two months of the fiscal year, the overall economic indicators suggest a promising outlook. The current account deficit, having plunged dramatically to $9.8 million, signifies that Pakistan is gradually stabilizing its economic landscape, laying the groundwork for further growth and recovery.
