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SBP’s Second Quarterly Report 2015 on the State of the Economy


KARACHI: After facing some difficulties in the initial months of the fiscal year, the economy ended the first half of FY15 with some positive developments, according to second quarterly report of the Central Board of Directors of the State Bank of Pakistan (SBP) presented in parliament yesterday.


According to Quarterly Report, major development witnessed in low inflation; improvement in budget deficit and balance of payment because of slash in global oil prices; increase in forex reserves; and stability in exchange rate.  However, the report states that the persistent structural weaknesses, particularly energy shortages, low FDI, losses of PSEs, and low tax-to-GDP ratio still continue to take a toll on the country’s overall economic performance.

“In order to address these issues and to put the economy on a higher growth trajectory, bold policy measures along with better overall governance are inevitable”, the report concludes.

Bird’s eye view of the report:


Industrial sector shown a modest growth of 2.3 percent in the large-scale manufacturing.

Commercial banks participated in primary auctions of longer-term securities as they anticipated a cut in the policy rate and also took advantage of the healthy term premium on PIBs.

SBP interest rate decreased because of low inflation.

In terms of the country’s fiscal performance, the budget deficit as percent of GDP was 2.2% on the first half of the year – slightly higher than the last year’s level.

Both federal and provincial revenue grew by only 5% in the first half of the year, compared with 13.9% last year.

Forex reserves during the period also raised because of decline in oil prices.

Moreover, the remittances are likely to increase in the rest of the year.

Exchange rate is also expected to remain stable, which coupled with low fuel prices will continue to dampen inflationary expectations.

Growth in real GDP is also expected to remain higher than last year’s level.

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