ISLAMABAD: State Bank of Pakistan (SBP) claimed that risks faced by national security and worsened law and order situation in the country are the major hurdles for the economic growth of Pakistan, ARY News reported.
State Bank of Pakistan released the Annual Report on the State of Economy for the year 2012-13 on Wednesday. According to the report Pakistan’s economy grew at 3.6 percent and inflation fell to single-digit in Fiscal Year (FY) 2013.
The average inflation rate recorded at 7.4 percent in the FY13 against the 9.5 percent target for the year.
The report stated that SBP projects GDP growth in the range of 3.0 – 4.0 percent for FY14, which is higher than the IMF’s growth forecast of 2.5 -3.0 per cent.
The SBP report said that challenges in managing public sector enterprises; the need to expand the tax net to untaxed or under-taxed areas; to contain untargeted subsidies; to tackle theft and leakages in the energy sector; to revitalize the private sector; and to increase documentation, were largely unaddressed during FY13.
The report said that, with insufficient external funding, the burden of financing the fiscal deficit fell entirely on domestic sources – specifically the banking system. The government borrowed Rs 939.6 billion from commercial banks, and an additional Rs 506.9 billion from SBP.
The domestic debt of Pakistan raised by Rs 1.9 trillion, which is 24.6 per cent higher from the end of FY12.