KARACHI:

Persistent fiscal imbalances, low domestic savings, weak productivity, and climate-related shocks remain critical hurdles preventing sustainable progress, noted the State Bank of Pakistan (SBP) in its Annual Report on the State of the Economy 2024-25.

The SBP projects GDP growth in FY26 at 3.25-4.25%, near the lower end of its forecast range, while inflation is expected to hover around 5-7%. The current account deficit is projected at 0-1% of GDP, indicating stability in the external sector. Yet, the central bank cautioned that flood-induced agricultural losses, high energy costs, and global trade uncertainty could derail these gains.

The recent floods in Punjab and Khyber-Pakhtunkhwa submerged vast farmlands, damaging key kharif crops such as rice, cotton, maize, and sugarcane

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