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Pak central bank raises GDP growth forecast

Written by: Staff
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KARACHI, Apr 19: Pakistan's central bank on Wednesday raised its forecast for gross domestic product growth in 2005/06 (July/June) to between 6.3 and 6.8 percent.

State Bank of Pakistan (SBP) had earlier forecast of 6.0 to 6.6 percent, but the upward revision shows growth short of a targeted 7.0 percent.

In its quarterly report, the bank said it expected consumer price index inflation to range between 7.7 and 8.3 percent for the year, broadly in line with its 8.0 percent target.

The bank warned that progress on bringing inflation down could be unsteady and it would maintain a tight monetary policy.

''While the deceleration is certainly welcome, the downtrend in inflation may prove unstable, and could pose a challenge to macroeconomic stability,'' the central bank said.

''SBP will therefore continue to retain a tight monetary stance,'' it added.

It also forecast a current account deficit equivalent to 4.7 percent of GDP by the end of June.

REUTERS

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