Dar optimistic Pakistan's economic growth can surpass 3% in FY23

Federal Minister for Finance and Revenue Ishaq Dar has expressed confidence that the country’s economy can surpass 3% growth in the ongoing fiscal year, higher than the 2% growth projected by the State Bank of Pakistan (SBP).

In an interview with Bloomberg on Friday in Washington, which was published early Wednesday morning, Dar expressed optimism that the nation’s economy will grow by more than 2%. “Maybe over 3 — I don’t want to be giving a big hope, but I’m fairly confident,” he said.

Earlier this month, the Monetary Policy Committee (MPC) of the central bank projected the country’s economic growth to decline to 2% in FY23, amid devastation induced by flash floods.

“The MPC discussed the post-flood macroeconomic outlook, based on currently available information, it projected GDP growth could fall to around 2% in FY23, compared to the previous forecast of 3-4% before the floods,” the MPC stated then.

Meanwhile, the finance minister reiterated that “there’s no plan to engage with bondholders across the board” asking them to extend the maturity date for Pakistan’s $1 billion global bond due in December, added the Bloomberg report.

However, “there are certain proposals,” that the government might consider, including issuing “replacement paper,” but the approach is to look at optional, not mandatory, measures, he said.

“I’m working to have a solid plan how to deal with all these public debt liabilities” that will be due in the fiscal year to June 2023, he said.

Dar confirmed debt liabilities of around $22 billion in the next 12 months.

5th successive decline: rupee settles at 219.71 against US dollar

Rupee's volatile ride

On managing the currency, the finance minister said that no specific moves are needed at the moment to support the rupee.

Dar said that the rupee has been “heavily undervalued”. “It is due to speculation -- and some players in the market have been responsible for that.”

“I thank those players in the market who have realised that that game at the cost of national currency will not continue,” he said.

However, Dar said that no specific measures are required to strengthen the rupee. “We don’t have the luxury of physically spending foreign exchange -- it’s very scarce at the moment,” he added.

His comments come as the rupee started to fall again during the previous week, losing close to 1% during the last five sessions. On Wednesday, the currency recorded a marginal drop again in early-morning trades.