Political uncertainty and inconsistency in economic policies exacerbated the economic situation in Pakistan during the first six months of the current fiscal year (2023-24), the State of Pakistan (SBP) said on Tuesday.
In its Economy Report for H1 FY24, the SBP said that despite some improvement in macroeconomic indicators, the economy continued to grapple with structural bottlenecks. “The major issues include limited savings, low investments in physical and human capital, weak productivity, stagnant exports, narrow tax base, and inefficiencies in PSEs,” the report read.
It added that weak governance and public administration also hindered investment and economic development. The report underscored the need for policy reforms to ensure sustainable development over the medium to long term.
‘IMF’s SBA reduced stress on external account’
According to the report maintained that the real economic activities moderately recovered against the contraction last year, while Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) helped reduce stress on external account.
Meanwhile, the current account deficit narrowed considerably, amid continued contractionary monetary and fiscal policies.
