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GDP growth estimated at 3-4% for FY12 – Alfalah Securities Limited

Karachi: As per the estimates revealed by the State Bank of Pakistan in its annual report, the economic growth is likely to remain at 3-4% in FY12 as against the target of 4.2% while the inflation is estimated to remain at 12.5%, slightly higher than the target of 12% in FY12.

According to Alfalah Securities Limited, the fiscal deficit is also expected to remain high at 6.5% of GDP as against the target of 4%. The deterioration in economic situation arose mainly due to the devastations of floods which burdened fiscal expenditures while lowering output. Similarly, the current account deficit is expected to be 1.5-2.5% of GDP which is though still lower as compared to last year however, it would exert pressure on the foreign reserves.

The repayment of loan to the IMF of USD 8.9 billion is scheduled to commence from February 2012 where the payment of USD 1.4 billion is due in the second half of FY12 which is likely to remain a major concern for the economic managers.

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