Financial situation


The International Monetary Fund (IMF) assessment report for July 2017 pointed out that Pakistan’s economic growth prospects are optimistic. The gross domestic product gross growth rate in 2016/17 is estimated at 5.0% due to the increase in China-Pakistan Economic Corridor (CPEC) program. Investment, energy supply will improve, and the medium and long-term growth rate is expected to reach 6% in the future.
 Inflation
 In 2016, global low oil prices led to a drop in inflation. Pakistan's consumer price index (CPI) averaged 2.863% in 2015/16; followed by a slight increase in global energy prices, the government raised fuel prices and passed costs on to consumers. 2017 The inflation rate has increased since the second half of the year, and the 2016/17 consumer price index (CPI) averaged 4.296%.
 In addition to rising electricity prices, Pakistan's inflation will also depend on factors such as cotton production and income, Rupee fluctuations and other factors. The weakening of the Pakistan Rupee against the US dollar puts pressure on the increase in CPI. On the other hand, the increase in foreign exchange reserves will help reduce the inflationary expectations and help control the consumer price index that affects the lives of the people. The IMF forecasts 2017/18 ( The CPI) average will rise moderately to 5.0%.
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 Financial situation
 Pakistan's taxation system is unbalanced by the tax base, poor fiscal management weakens the Pakistani economy, and tax evasion is widespread (108,890,000 people, and the taxpaying population is only 2.5 million). The funding requirements and national security expenditures under the China-Pakistan Economic Corridor (CPEC) transport and energy program have impacted Pakistan’s fiscal position, and domestic financing cannot meet the government’s large budget deficit demand. This is to maintain overall economic stability and avoid the private sector’s economy. Excluded, Pakistan relies on foreign aid and loans.
 To assist the Pakistani government in reducing energy shortages, stabilizing public finances, and increasing fiscal revenues and expenditures, the IMF provided Pakistan with a total loan of US$6.3 billion in 2013. The loan was finalized in September 2016. One of the IMF's loan development targets is to standardize the fiscal deficit. During the loan period, the fiscal revenue is slightly improved. Due to the relatively low oil and natural gas prices, the expenditure has dropped significantly. However, public debt is denominated in domestic currency and it is expected that the public debt balance will remain high in the future. During the IMF loan period, the fiscal deficit will continue to decline due to the specification of loan conditions.

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