Pakistan Foreign Reserves to hit $16 billion – Sunrise Research

Pakistan Foreign Reserves are likely to cross $16 billion soon. State Bank has currently $10 billion. This research has been conducted by Sunrise Research.

The World Bank in recent study analyses Pakistan’s medium-term outlook that presents moderate downside risks. The external environment is expected to starting improving gradually with global GDP growth rising from 3.2% in 2014 to 3.5 in 2016. The medium term outlook as per World Bank study as follow:

Real GDP is projected to grow at 3.6-4.0% in FY14 driven by manufacturing & services sectors, better energy availability & early revival of investor confidence. Pakistan’s real GDP growth is projected to regain momentum slowly, to reach 4.4% by FY16.

Revenue collection is expected to be close to the revised target of Rs 2,345 billion. Tax- to-GDP ratio would exceed the level achieved in FY12.

Current expenditure of the federal government is projected to decline.

Development spending of the Govt. is projected to decline from 5% of GDP in FY13 to 4.1% in FY14 but only because of a sharp fall in net lending.

Overall, the fiscal deficit is expected to fall to 5.8% in FY14 of GDP, from 8% last year.

Expected budget support from donor agencies to improve external financing for the budget

Repayments to IMF will also be higher.

The external financing position in FY14 is expected to be substantially better than in FY13.

Trade deficit, access to reliable energy remains uncertain and unwieldy business regulation continues to constrain enterprise.

Recurrent expenditure is expected to remain below the level achieved last year.

The current account deficit is projected to approach a modest 1% of GDP by end-FY14.

Higher financial in flows are expected to be attracted by lower country risk, privatizations, new trade relations with neighbors and the opening of special economic zones and multilateral flows.

Official foreign exchange reserves are expected to build from US$6.0 billion by the end of FY13 to about US$16 billion by end-FY16.

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