Warning of the dire situation facing the country’s economy, the Finance Ministry has predicted that the inflation rate will remain between 21 and 23 percent during the current financial year.
The Finance Ministry in its Monthly Economic Update and Outlook has said that due to the devastation caused by the floods economic growth has been expected to fall short of the target set in the budget.
“Low growth rates, high inflation rates and depletion of foreign exchange reserves are among the key challenges for policymakers,” the report said.
According to the report prepared by the Economic Advisory Wing of the Ministry of Finance the total fiscal deficit during July-October 2022-23 was 1.5 percent (1.266 trillion) which was 0.9 percent (587 billion) of GDP during the last financial year.
The financial deterioration was due to increased expenditure due to high markup payments, the report said adding that during the first five months of the current financial year (July-November) the average was 25.1 percent.
The current account deficit from July-November was $3.1 billion which was $ 7.2 billion during the same period last year, mainly due to the improvement in the trade balance. The current account deficit (CAD) narrowed to $276 million in November from $569 million in October.
Imports of goods and services fell by 5.9 percent on a monthly basis and 32 percent year-on-year, according to November balance of payments data.