4.2% GDP growth projected for FY12

Karachi –– The Government of Pakistan has projected GDP growth at 4.2 %, and inflation below 12 %for Fiscal Year 2012.

According to Alfalah Securities Limited, growth performance for the current fiscal year remained dismal with only 2.8 percent expected to be achieved as against the budgetary targets which was projected at 4.5%. Investment is being forecast to increase by 5 %YoY at 16.6% of GDP in FY12, and consumption is set to decline by 4.2% to 90.4 %.

The government is likely to take revenue mobilization measures, including ‘reformed GST’, to increase FBR’s tax-to-GDP ratio to 9.7 % from the current 9.1%. The revenue target is projected to be around PkR 2.1 trn, of which tax revenue to be of PkR 1.952 trn, and non-tax revenue at generate PkR 637 mn. These targets though conservative, would be challenging to achieve considering the political instability, deteriorating law & order situation, ongoing circular debt issue and electricity crises. These factors would hinder the operational efficiency of almost all the sectors of the economy.

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