Macroeconomic Forecast Pakistan

November 2005 | Macroeconomic Forecasts

The economic impact of the devastating earthquake on Pakistan's economy will be limited. Despite the expected widening of the fiscal deficit to 3.8% of GDP this year, with the government facing big bills to rebuild towns and roads, the reconstruction effort could deliver a significant boost to domestic demand, supporting growth levels. We thus expect the economy to expand by a relatively strong 6.7% this fiscal year. Amid high domestic oil prices, we expect inflation to slow only slightly to 8% in 2005/06, from 9.3% last year. However, higher interest rates should ease price pressure

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