Real GDP grew by 1.7% in H1-FY2023-24: SBP

The State Bank of Pakistan (SBP) said that Pakistan’s macroeconomic conditions improved and real GDP grew by 1.7% while inflationary pressures remained at elevated levels during the first half of fiscal year 2023-24.

The SBP, in its half yearly report, titled ‘State of Pakistan’s Economy Report for H1-FY24’ which contains analysis prepared on data out turns for the July-December FY24, stated that the real economic activities in the first half moderately recovered against the contraction last year and the trend was likely to continue in the second half of FY24 as well.

The real GDP, driven by the agriculture sector, grew by 1.7 percent during the period, the SBP noted and projected the real GDP growth for FY24 in the range of 2 to 3 percent in the backdrop of improvements in business confidence, high frequency demand indicators since November 2023, and prospects for a good wheat production during FY24.

In the first half, the recovery in agriculture sector also supported some of the agro-based industries while withdrawal of import prioritization measures improved the availability of raw materials for the industry, the report mentioned.

Meanwhile, Stand-By Arrangement (SBA) with the IMF (International Monetary Fund) reduced stress on external account as its approval eased external borrowing constraints, leading to an increase in financial inflows during H1-FY24, the SBP observed.