ISLAMABAD: The government said on Monday that Pakistan’s economic growth would be affected during the current and next fiscal years due to an almost 20 per cent cut in development budget for fuel subsidies and inflationary impacts of global supply chain disruptions amid the war in the Middle East.
“This (cut in development budget) will have a negative impact and, coupled with international oil prices and inflation, will result in economic slowdown and affect our growth target of 4.2pc” for the current year, Planning Minister Ahsan Iqbal said while addressing a news conference.
This is the first official confirmation of lower than targeted economic growth, although international lenders have projected the growth rate between 3.2pc and 3.5pc.
Responding to the question, Iqbal said that the Public Sector Development Programme (PSDP) for the current year had been slashed by Rs173bn to Rs837bn from the Rs1.01 trillion target set in the budget.
He said PSDP was reduced to finance the Prime Minister’s Austerity Fund, created to subsidise fuel prices, particularly that of diesel, in the middle of the harvesting season.
