Pakistan GDP Growth to Slump Below 2.5% in FY23: Finance Ministry

The catastrophic floods around the country have led the government to update several gross domestic product (GDP) targets. Sources in Finance Ministry told ProPakistani that the GDP growth will remain around 2.3 percent during the fiscal year 2023 (FY23) against the International Monetary Fund’s (IMF) forecast of 3.5 percent. Moreover, the country is expected to suffer losses of around $9.3 billion due to the floods. The Ministry of Finance will soon complete the preliminary assessment of the impact of flood disasters with the support of other stakeholders, the sources added. The sources said that 37 percent of the country’s population has been affected by recent floods, leading to an unprecedented increase in poverty and unemployment, which ultimately could push the poverty rate from 21 percent to 36 percent. The sources further said that the inflation rate could reach 30 percent during FY23. The floods severely impacted the agricultural sector in Sindh, Balochistan, and Khyber Pakhtunkhwa. The growth in the agricultural sector is expected to decelerate by 0.7 percent from the planned target of 3.9 percent during FY23, the sources revealed. The growth in the industrial sector is estimated to come down by 1.9 percent from the planned target of 5.9 percent, while the post-flood growth of the services sector is estimated to be 3.5 percent against the target of 5.1 percent during FY23. The sources further said that Pakistan’s external woes are not over yet, despite IMF’s approval of a $1.1 billion tranche for the country. The liquidity position needs to be strengthened further with the help of friendly countries.