Pakistan Economic outlook improved despite terrorism and energy problems

Written by PTI | Karachi | Updated: Jul 20 2014, 00:32am hrs
Despite problems of terrorism and energy crisis, the economic outlook of Pakistan improved last fiscal with inflation remaining in single digit and foreign remittances showing a rise, the State Bank of Pakistan said today.

Pakistan follows a financial year beginning July 1-June 30.

Unveiling its bi-monthly monetary policy for the new fiscal, the Bank kept the key interest rate unchanged at 10 per cent and forecast a CPI inflation rate of 7.5-8.5 per cent during the year.

Governor State bank, Ashraf Mehmood Wathra told a news conference that despite the problems of energy crisis and terrorism in the country the economic outlook had improved in the last fiscal year.

This he said was due to improved foreign remittances, better tax returns and reduced government borrowing from the banks.

"But more tax reforms have to be undertaken to overcome the budget deficit and also improve the overall economic scenario," he said.

Wathra said the government borrowing from banks had decreased in the last fiscal year while private sector had availed loans of 329 billion rupees during the period.

This was a positive indicator of development taking place in private sector.

He said that rate of inflation remained below 10 percent in the last fiscal year and was expected to remain unchanged in next two months.

He said the foreign remittances had increased in the last six months with forex reserves with the central bank at USD 9.6 billion.