The Ministry of Finance emphasizing the growing recent account deficit and greater inflationary pressure as foremost tests has said dependence on greater and steadied remittances in keeping the current account deficit “manageable and financeable” in its prediction.
According to Monthly Economic Update and Outlook released from the finance ministry, it said that “assuming sustained remittance inflows, the improvement likely to take place in the trade balance will be mirrored in reducing current account deficits, allowing for manageable and financeable deficits.”
The stance of the ministry on greater inflation was that the year-on-year (YoY) inflation trudged in current months. Higher international product prices, house rent, electricity charges, and transportation prices are among the main contributors to inflation but the government is building relief, administrative, and policy struggles to decrease the inflationary pressures in the coming months.
Read more: Foreign remittances fall by 6.6% to $2.35 billion in November 2021
Moreover, the Ministry of Finance accepted that the present account deficit was moving altitudes of 2018 when it had gratified $18 billion and the PTI had always accused the former PML-N government that it had innate an economy in a muddle.
“The current account posted a deficit of $7.1 billion (5.3 percent of GDP) for Jul-Nov FY2022 as against a surplus of $1.9 billion (1.6 percent of GDP) last year. Previously, the current account deficit was $7.2 billion (5.5 percent of GDP) during July-Nov FY2018,” the Ministry of Finance made it clear.
Currently, the government wishes to upsurge agriculture productivity by taking numerous initiatives to safeguard food security by answering food inflation in the future.
“The low base effect may contribute to keeping inflation rate of December in double-digit. Although, the forecast probability margins are wide, most likely, YoY inflation is expected to remain in double-digit in December but slightly less than the last month’s number,” the Ministry predicted.
As per Balance of Payment (BOP) data, exports of services and goods hiked by nearly 13 percent in November as compared to October.
