JS Securities Limited – JS Research (09-06-2023)

Karachi, June 09, 2023 (PPI-OT): Economic Survey FY23: Closing the year of unprecedented challenges

The Pakistan Economic Survey for FY23 (PES-FY23) was released yesterday, releasing key economic analysis on the outgoing year, with a press conference led by the Finance Minister and other key government officials.

The year witnessed record-high inflation and interest rates, with substantial PKR/US$ depreciation. To address the challenges, a number of ad hoc measures were taken, leading to supressed Current Account Deficit this year. On the fiscal side, the govt faces the challenge to address a tall fiscal deficit once again, this time led by massive mark-up expenditures.

Closing the year that faced unprecedented challenges, the Finance Minister briefed regarding the government's strategy for FY24, targeted at 3.5%, where he emphasized about the country to witness rebound in GDP growth. He apprised the growth targets to be led by spending on development and import normalization for next year.

Higher growth is also expected on back of improved crop outlook post Kissan package, and price stability given expected steady exchange rate.

The govt expects inflation rate in the medium term to normalize due to the high base effect in FY24/25, nonetheless, impact of ongoing challenges is not ruled out to pose a risk on potential growth of FY24.

We present a snapshot of key figures from the Survey.