SBP’s annual report
State Bank of Pakistan (SBP) on Thursday released its Annual Report on the state of country’s economy for the fiscal year 2016-17.
According to the Report, Pakistan’s economy continued to expand with real GDP growing by 5.3 percent in fiscal year (FY17), the highest growth achieved during the last 10 years. A sharp recovery in agriculture sector, healthy value addition in the services sector, and continued improvement in manufacturing sector contributed to this broad-based growth.
From the demand side, the growth was led by a surge in consumption followed by a moderate increase in investment. The report explained that the major impetus to economic activity came from an accommodative monetary policy and consequent increase in private sector credit especially for fixed investment; tax incentives for agriculture, exporting industries and investment; a steady increase in development spending; and, continuing work on infrastructure and energy projects under CPEC. These factors led to increase in domestic demand.
With the increase in domestic demand, imports also picked up pace. This, together with decline in exports and remittances, resulted in current account deficit increasing to US$ 12.1 billion in FY17 compared to US$ 4.6 billion in FY16. The report noted that higher official and private inflows helped to partially finance the current account deficit.—NNI