Pakistan cuts growth forecast |
Pakistan's central bank cut its year to June 2006 economic growth forecast Friday to 6.0-6.6 percent, saying it was due to a sharp tail off in manufacturing and agriculture.
The figure was down from the 6.3-6.8 percent range given by the bank in October, and lower than last year's growth of 8.4 percent, which made Pakistan one of the world's fastest expanding economies.
"Growth in large scale manufacturing has decelerated sharply and the production in two of the four major crops was significantly below target," the State Bank of Pakistan said in a report for the fiscal first quarter.
Industrial growth weakened in the three months to Septmber, registering a single-digit increase of 6.1 percent in contrast to the 19 percent growth during the corresponding period last year.
The report said that October's devastating South Asian earthquake, which killed more than 73,000 people in Pakistan, was unlikely to have much effect on economic growth given the remote region affected.
Pakistan's Prime Minister Shaukat Aziz said in November that the economy would survive the disaster and growth would stay close to pre-quake government targets.
Meanwhile inflation, which Pakistan has recently begun to curb, is likely to remain at the projected 8.0 percent target but is still too high, the bank said.
"While inflation is falling, it needs to be reduced further even at the cost of sacrificing some growth in the short-term," the Karachi-based bank advised the government's economic planners.