Islamabad: presenting a mixed bag of economic stabilization apparently at the expense of manufacturing stagnation, the government hinted more on Thursday in the interest rate in the midst of the growing inflation estimates.
In its monthly review, the Ministry of Finance (MOF) also confirmed fiscal income in difficulties to meet the budgetary objectives, but an overwhelming growth in non -imposed income, particularly won through the state gain of maximum interest rates and the largest oil on oil that drives the primary budget surplus and the TEPID fiscal deficit, at 3pc and 2.2pc of GDP, respectively.
“The large -scale manufacturing recovery (LSM) is still difficult,” said the MOF in its monthly economic update and perspectives for April, and added that LSM continued under pressure, “with the decrease in production in 1.9PC during the fiscal year of July, the fiscal year of the year February of the Prosecutor’s Office, compared to a 0.4PC contraction last year. 3.5pc.”
He said that the manufacturing perspectives “can gradually improve in the coming months, and the recovery is expected to be gradual amid the continuous and recent contraction of moms.” However, he said that improvements in high frequency indicators, such as increased car production, raw material imports and a more accommodated monetary posture, indicate a cautious optimism.
The Ministry of Finance suggests more cuts in the interest rate
The MOF said that the improved climatic conditions and the greater availability of water would probably support greater crops and better agricultural conditions, contributing to general economic growth, despite the warnings of the authority of the Indo River System (IRSA) and the MAP Office on the conditions similar to drought.
The Government anticipated that inflation remained between 1.5 and 2 years in April, possibly increasing to 3-4pc in May. Exports and remittances are expected to maintain their upward trend in the coming months, maintaining the current account within the manageable range.
The monthly report says that the macroeconomic indicators of Pakistan showed signs of general stabilization, backed by a better fiscal performance, an external strengthened account and an inflation of setback. The mobilization of income and the current expenditure have contributed to a narrower fiscal deficit and a surplus primary balance. Despite claiming a restriction, the total expenditure still increased by more than 23pc.
The MOF said the current account registered a higher surplus, driven by remittances and export growth, while reserves improved, and the exchange rate remained stable and aligned with the market. “Inflation has been reduced to its lowest level, creating space for a monetary policy more support in the coming months,” said the MOF, speculating more policy rate cuts by the Central Bank.
He expressed the satisfaction that fiscal consolidation was on the way as net income grew in 43.3pc in the first eight months (July-February) to RS6.78 billion, driven by an increase of 73pc in non-tax revenues, than non-tax revenues, which were reached.
On the other hand, FBB tax collection increased by 25.9pc to RS8.453TR during July-March 2015. Total expenses increased by 23.2pc to RS10.359TR, with a current expenditure of 17.2pc to RS9.564tr, marking payments (18.2pc) and unmarked expenses (15.7pc). The development expense increased by 50.3pc, said the MOF. These trends reduced the 2.2PC fiscal deficit (3.1pc) and improved primary surplus to RS3.452tr (3pc of GDP) of RS1,834tr (1.7pc).
Posted in Dawn, April 25, 2025
