SBP sees signs of economy improving

KARACHI: Gross domestic product (GDP) growth rate is expected to remain in the range of 2.5-3.5 percent.

State Bank of Pakistan (SBP) in its 2008-09 second quarterly report released here said.

The report said that the country’s economic indicators showing signs of improvement with better financial management. The rate of inflation in the last quarter of the current fiscal year is expected to drop down fast, said the report.

The report said that during the initial six months of the current fiscal year, large-scale industrial production fell by 5.4 percent, while the exports during July-February increased by 4.3 percent and imports dropped down by 1.5 percent.

The quarterly report further said that during July-February, tax revenue increased by 20.4 percent and net foreign investment by 1.9 percent, while money supply also increased by 4.9 percent. Financial deficit to GDP ratio stood at 1.9 percent, balance of trade deficit at 6.9 percent and current account deficit remained at 4.5 percent.

The report said that increasing the tax to GDP ratio was imperative, while for the long and medium terms development projects, Pakistan would have to rely on low-rate loans of international organizations. Agriculture sector growth rate would also improve in 2008-09, the report forecasts.