Pakistan Finance Minister Miftah Ismail expects the economy to grow more than 3.5% for the fiscal year that started in July, Bloomberg News reported on Saturday.
Ismail predicted inflation, running at the highest in 47 years and the second highest in Asia, was close to its peak and would average 15% for the year, the report said.
Curbs on luxury items may remain in place for longer than currently anticipated, Ismail was quoted as saying.
“Import payments should equal dollar inflows, which means curbs on luxury items may remain in place for longer than currently anticipated”
“I want to see a Pakistan that lives within its means. That’s it,” Ismail, 57, told Bloomberg News. “Nothing can happen in one year, but we can start.”
The outlook has been further complicated in the aftermath of historic floods, which could have an economic impact of at least $10 billion, adding to a list of problems for Ismail that includes political turmoil and raging inflation.
Less than a week ago the International Monetary Fund gave Pakistan a $1.16 billion lifeline to avoid imminent default. Pakistan also secured pledges for a total of $9 billion in investments and loans from Qatar, Saudi Arabia, and the UAE. Ismail said he expects a $1 billion investment in listed state-owned companies to materialize in about a month.
Ismail expected economic growth of more than 3.5% for the fiscal year that started in July, down from an initial target of 5%. He predicts that inflation, running at the highest in 47 years and the second highest in Asia, is close to its peak and will average 15% for the year.
For now, Pakistan has restricted certain imports including those for automobiles and automotive parts that’s seen Toyota Motor Corp. and Suzuki Motor Corp.’s local units temporarily halt production. Ismail planned the measures to last for an initial three months but the impact of the floods may see them extended.
“If I have limited dollars, I will absolutely make sure that I use them to buy wheat, I use them to buy edible things for our people,” said Ismail. “Maybe we can delay buying Audis and Mercedes.”
