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Excessive macroeconomic imbalances may flatten growth in Pakistan, warns finance ministry

ISLAMABAD: Despite a rebound of almost 6% in fiscal year 2022, the country may not sustain its growth rate in the next year in the presence of excessive macroeconomic imbalances, the finance ministry has warned.

In its monthly report, the ministry said the excessive macroeconomic imbalances could flatten growth in fiscal year 2023, a Karachi based newspaper The News reported Sunday.

“Pakistan is currently facing several severe challenges: accelerating inflation, high external deficits, exchange rate depreciation, declining foreign exchange reserves, and mounting uncertainty,” read the statement.

“On the other hand, economic growth remains relatively high, but in the presence of macroeconomic imbalances may not be sustainable.”

The ministry said the country has achieved GDP growth of 5.97% in FY2022, but “the fiscal situation and external sector performance are making it difficult to sustain and impacting the growth outlook in coming year”.

“The persistent growth of more than 5.50% for the consecutive two years has laid the foundation of higher and inclusive growth, provided the consequent macroeconomic imbalances are addressed prudently”.

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