Finance minister projects 2-2.5pc economic growth in FY24

Pakistan’s economic growth is expected to be between 2 and 2.5 percent for the fiscal year 2024 primarily driven by the agriculture and industrial sectors, says Caretaker Finance Minister Dr Shamshad Akhtar in her virtual address to ‘IPO Summit 2024’ on Saturday.

Dr. Akhtar, however, expressed concern over the lack of activity in the initial public offerings (IPOs) at the Pakistan Stock Exchange (PSX), noting that only one IPO was launched in 2023.

She emphasized the need to revive the IPO market to attract investment and diversify business financing.

On the fiscal front, Dr. Akhtar projected that tax revenue collection would likely exceed the target of Rs9.4 trillion, potentially reaching Rs10 trillion by the end of the year. 

She also pointed out the improvement in the country’s foreign exchange reserves, which have increased from $4 billion to $9.1 billion during her tenure as finance minister.

Regarding monetary policy, the finance minister mentioned that the State Bank of Pakistan (SBP) is considering a reduction in the policy rate, currently at a record 22%, to boost economic activity.

She noted that any decision on rate cuts would be contingent on the easing of recent high inflation levels.

Dr. Akhtar commended the Pakistan Stock Exchange for its performance, with a 55% return in 2023, ending the year at over 62,450 points. 

She highlighted the PSX's role as a crucial capital source for the private sector and urged efforts to expand the investor base, which has been stagnant at about 200,000 for some time.