ISLAMABAD: The Finance Ministry has stated that inflation outlook would be higher for June 2024 compared to the previous month consequent to increase in the prices of perishable items driven by Eid-ul-Azha.
This was revealed by the Economic Adviser Wing (EAW) of the Finance Ministry in its monthly Economic Update and Outlook for June 2024 released on Friday. The update also emphasized fiscal discipline, effective implementation of home-grown growth programme along with bilateral and multilateral cooperation will necessitate sustainable potential growth path in the coming years.
The fiscal deficit during July-April 2024 stood at 4.5 percent of the GDP and federal public sector spending during July-April 2024 was Rs359 billion, down by 11.2 percent against Rs404 billion. However, the primary balance was surplus by 1.5 percent of GDP against the annual target of 0.4 percent of the GDP.
Monthly Economic Update and Outlook of EAW: Credit to private sector declines 39.7pc YoY
A comparison of economic indicators of July-May 2023-2024 over the same period of last year noted that remittances after an increase of 7.7 percent reached $27.1 billion against $24.1 billion for the same period of last fiscal year, exports stood at $28.7 billion against $25.8 billion reflecting an increase of 11.3 percent. Whereas, imports decreased contracted by 2.3 percent to $48.4 billion from $49.5 billion for the same period a year ago.
The gross domestic product (GDP) growth has been increased to 2.4 percent in fiscal year 2024, said the finance ministry, adding that this growth was broad-based, with the agriculture sector expanded by 6.3 percent, while industry and services each grew by 1.2 percent.
The agriculture sector demonstrated robust growth in the fiscal year 2024 backed by quarterly growth. This recovery is attributed to government initiatives, improved input supply, and increased credit disbursement to farmers. As a result, important crops including cotton, rice, and wheat showed healthy growth, while sugarcane and maize experienced slight declines.
The farm tractors production – during July-May 2024 – increased by 44.5 percent and sales by 48 percent. Agricultural credit disbursement also increased by 34.5 percent during this time period.
LSM sector experienced a moderate growth of 0.45 percent during July-April 2024 after consecutive negative growth in the first two quarters. The LSM is now showing a recovery in the third quarter, noted the economic update that nearly 50 percent of sub-sectors have recovered and posted positive growth.
On the external front, a sustained improvement was observed in the current account balance. The current account posted a deficit of $0.5 billion for July-May fiscal year 2024, compared to a deficit of $3.9 billion last year, largely reflecting improvements in the trade balance and remittances.
Copyright Business Recorder, 2024
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