Pakistan’s GDP growth to slow to 4.3%-4.7% in FY19 and FY20: Moody’s
LAHORE: Moody’s in a report released on Thursday projected Pakistan’s real GDP growth to slow to between 4.3-4.7% in FY19 and FY20 from 5.8% in FY18 due to policy measures taken to address the external imbalance.
For addressing the external imbalance, Moody’s stated policymakers have tightened domestic monetary conditions by allowing the rupee to depreciate by around 30% since the start of December last year.
It added, the hike in interest rate by 425 basis points to 10%, tightening fiscal policy and imposition of regulatory duties on imports of non-essential goods was initiated to address the external imbalance.
Due to a sharp depreciation of the rupee since December last year, higher electricity and gas tariffs, Moody’s said it expects inflation to increase to an average of 7% over FY19 before moderating to an average of 6.5% in FY20.