Government revises GDP target to 2.3% in FY23 amid catastrophic flooding – Mettis Global Link

Sept. 5, 2022 (MLN): In the wake of unprecedented flooding that resulted in losses of nearly $9.3 billion, Pakistan’s government has revised its GDP target to 2.3% against the IMF’s forecast of 3. 5%.

The latest document from the Ministry of Finance shows that the growth of the agricultural sector is expected to slow by 0.7% from the annual plan of 3.9%, as the sector has suffered severe damage and key cash crops have been destroyed.

Meanwhile, industrial sector growth is likely to decline by 1.9% from the annual plan of 5.9%. Similarly, post-Flood service growth is expected to be 3.5%, against the target of 5.1%.

In the midst of this depressing period, the supply chain has been severely disrupted, with inflation already rising to 27.26% by August 2022, the highest since 1975, and with supply difficulties and communication breakdowns, inflationary pressures will intensify.

Last week, the federal government exempted the sales tax on imports of onions and tomatoes until December 31, 2022, in an effort to address the problem of food shortages caused by catastrophic flooding.

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This decision will help stabilize the already skyrocketing prices of onions and tomatoes on the domestic market in these difficult times.

It is pertinent to mention that the losses far exceed the $1.16 billion tranche received from the IMF.

To overcome the huge losses, the country’s liquidity position needs to be strengthened.

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Posted on:202-09-05T14:58:14+05:00

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