Updated on
Summary
State Bank of Pakistan (SBP) published its quarterly report on economy for second quarter of year 2009/10. The central bank raised its fiscal deficit forecast for the 2009/10 (July-June) fiscal year to between 5.0 percent and 5.5 percent of gross domestic product (GDP).In a quarterly report on the economy, SBP maintained its GDP growth forecast for this fiscal year at between 2.5 percent and 3.5 percent. Inflation was likely to remain in the range of 11 to 12 percent. However, it lowered its forecast for the 2009/10 current account deficit to 3.2-3.8 percent of GDP, from previous estimates of 3.7-4.7 percent. But the State Bank said a better-than-expected export performance in recent months and a rising flow of remittances was encouraging and had resulted in the current account deficit narrowing more than expected.The bank kept its key policy rate unchanged at 12.50 percent for April and May amid worry about persisting inflationary pressure and a widening fiscal deficit.The bank had said that the full-year CPI would average close to 12.0 percent.
