Complex Economic Challenges
Higher inflation and tougher economic challenges might cause a slowdown in growth due to floods, which in turn may impact resource mobilization efforts. Ministry of Finance
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Already confronting inflationary and external sector pressures, the economy of Pakistan is under a severe humanitarian crisis due to recent flash floods, according to the ‘Monthly Economic Update & Outlook, October 2022’ by the Ministry of Finance (MoF). The report states that large-scale relief and rehabilitation requirements due to the catastrophic floods posed significant challenges to fiscal consolidation efforts.
Since government needs to allocate higher resources for the rescue and rehabilitation of flood victims and the rebuilding of infrastructure, there will be a significant pressure on overall expenditures, MoF
Since government needs to allocate higher resources for the rescue and rehabilitation of flood victims and the rebuilding of infrastructure, there will be significant pressure on overall expenditures.
The outlook anticipated that Consumer Price Index (CPI) inflation will remain in the range of 21-22.5% during FY 23. It is pertinent to note that food inflation in Pakistan rose for the ninth consecutive month in October 2022 and is expected to rise further due to nationwide floods that destroyed crops as well as farmlands.
GRAPHICS OF THE DAY
Remittances decreased by 6.3% during Jul-Sep FY 2022-2023 compared to the same period last year
Exports increased by 5.5% while imports decreased by 7.9% during Jul-Sep FY 2022-2023 compared to the same period last year
Current account deficit decreased by USD 1.3 billion during Jul-Sep FY 2022-2023 compared to the same period last year
Foreign exchange reserves decreased by USD 9.2 billion during Jul-Sep FY 2022-2023 compared to the same period last year
Foreign direct investment (FDI) decreased by 47% during Jul-Sep FY 2022-2023 compared to the same period last year
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