KARACHI: Pakistan’s central bank on Tuesday projected the country’s economic growth rate to remain between four and five percent during the current fiscal year, as it revised its earlier forecast of 3.9 percent due to domestic economic recovery and improved inflation outlook.
The central bank also decided to keep the key policy rate at seven percent, a stance it has been maintaining since June 2020.
“The Monetary Policy Committee [MPC] was encouraged by the continued domestic recovery and improved inflation outlook following the recent decline in food prices and core inflation to keep the policy rate unchanged,” said Governor State Bank of Pakistan (SBP) Dr. Reza Baqir while addressing a virtual news conference in Karachi.
“Besides, the consumer and business confidence have risen to multi-year highs and inflation expectations have fallen,” he said, adding: “Due to these positive developments, growth is projected to rise from 3.9 percent in FY21 to 4-5 percent this year.”
The SBP governor maintained the key risk to economic growth could come from the spike in COVID-19 cases amid a low vaccination rate.
“The MPC felt that the uncertainty created by the ongoing fourth COVID-19 wave in Pakistan and the global spread of new variants warranted continued emphasis on supporting the recovery through accommodative monetary policy,” he added.
Discussing the country’s current account deficit, he said the imports were expected to grow on the back of the domestic economic recovery.
“The MPC noted that the market-based flexible exchange rate system, resilience in remittances, an improving outlook for exports, and appropriate macroeconomic policy settings should help contain the current account deficit in a sustainable range of two to three percent of the GDP in FY22,” he added.
Baqir said that Pakistan’s economic recovery was primarily driven by large-scale manufacturing, construction and service sectors.
He added that growth was further expected to pick up during the current fiscal year due to several measures announced in the budget.
Such measures include increased development spending along with reduced regulatory duties and sales tax on the import of raw materials and capital goods.
“These measures will directly benefit the construction and allied industries, as well as export-oriented industries. Agricultural growth is also expected to contribute favorably [to the economy] despite reported water shortages at the start of the sowing period of Kharif crops,” the SBP governor said.
The governor said that Pakistan’s external position was at its strongest in the last several years.
“This is the lowest current account deficit in 10 years, supported by all-time high exports and remittances. The SBP’s forex reserves rose by $5.2 billion during FY21 to end at over $17 billion or around three months of imports,” he added.
Pakistan’s central bank raises GDP forecast to 4-5% amid domestic economic recovery
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Pakistan’s central bank raises GDP forecast to 4-5% amid domestic economic recovery
- The State Bank of Pakistan decides to retain the key policy rate at seven percent, a stance it has been maintaining since June 2020
- The central bank governor says the risk to economic growth could stem from a surge in COVID-19 cases amid a low vaccination rate
Pakistan’s Punjab deploys satellites, drones, AI to combat smog
- Senior minister warns industrial masks may become necessary without a change in public attitudes toward pollution
- Cities in Punjab face worsening smog each winter, driven by crop burning, vehicle emissions and industrial pollution
ISLAMABAD: Punjab Senior Minister Marriyum Aurangzeb on Wednesday said Pakistan’s most populous province deployed satellites, drones and artificial intelligence to tackle smog, warning that industrial masks may become necessary if public attitudes toward air pollution did not change.
Punjab cities face worsening smog each winter, driven by crop burning, vehicle emissions and industrial pollution that threatens public health and daily life. The smog season typically begins in late October, peaks between November and January and can persist through February.
Smog causes symptoms such as sore throats, eye irritation and respiratory illnesses, while prolonged exposure raises the risk of stroke, heart disease and lung cancer. Children are more vulnerable due to higher breathing rates and weaker immune systems.
“We have the AI machine-learning forecasting system in place, surveillance drones and technology cameras,” Aurangzeb said while addressing an event.
“At present, what is considered one of the world’s best environmental protection forces — with training, equipment, technology and digitally integrated data — is operating in Punjab,” she added.
Aurangzeb said surveillance is now being carried out through drones.
“There is monitoring, technology, cameras,” she continued. “Everything is digital.”
The minister maintained the eastern corridor from India was a major source of smoke which becomes active during the winter season.
She said this was the first time a complete testing system was introduced by the Environmental Protection Agency to measure pollution released by vehicles.
She added the government has loaned 5,000 super seeders to farmers, which are agricultural machines that plant crops directly into fields without removing leftover stubble, reducing crop burning, and helping curb winter smog.
Aurangzeb warned the situation could reach a point where people may have to use industrial masks and carry therm around like a “purse or wallet.”
“This will become a mandatory item if we do not change our attitudes and habits toward air quality, climate and conservation.”
Pakistan’s main urban centers routinely rank among the most polluted cities in the world, with vehicular emissions remaining one of the top contributors to air pollution.
The severe air pollution also undermines economic productivity and diminishes the quality of life for millions of residents.
