Pak central bank slams Shehbaz govt’s focus on growth over financial stability, warns of economic crisis ahead

Pakistan's central bank criticised the Shehbaz Sharif government for prioritising growth at the cost of price and financial stability.The State Bank of Pakistan in its annual report said that such economies are not able to sustain growth and face financial crisis, reported the Dawn.

The Sharif government's focuson growth for the fiscal year 2023 might result in a fall in growth overall as it failed to bring price stability with financial stability, it said.

In its report, 'State of the Economy of the fiscal year FY22',the State Bank of Pakistan anticipated that the economic growth for FY23 will be lower than what was expected. It added that the growth rate will remain less than three or four per cent.

The fall in growth has resulted in mass layoffs of hundreds of people from the trade and industrial sectors. In these sectors, it is hard to survive under the focus set by the government.

The inflation in the South Asian country has been nearly 25 per cent in the last five months, worsening aspects of growth and stability.

The SBP added that economies that prioritise 'price stability' tend to have lower inflation as well as less volatilityin both inflation and growth.

However, the report further stated that estimating the growth of side supplies like the price of energy and food is hard to predict as they can be driven by both national and international developments.

The document said, "In Pakistan, the coverage and timeliness of information need improvement and there are often large revisions to 'annual' GDP growth estimates relative to provisional estimates. These, together with scarce availability of high-frequency real sector data, complicate forecasting and real-time decision making."

(With inputs from agencies)

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