The first half of fiscal year 2008-09 witnessed a slow growth in Pakistan’s economy coupled with hyper inflation, acute power shortages, a slowdown in the manufacturing and services sectors, a sharp increase in interest rates and widening current account deficit.
Pakistan Telecommunication Authority has pointed out this in its quarterly report for October-December 2008.
Report said the development indicators of the sector i.e., subscribers, teledensity and revenue continued to show declining trend during Jul-Dec, 2008. Total teledensity was increasing more than 7pc per quarter since July 2007. However, its rate of growth declined in last quarter of fiscal year 2007-08 where its quarterly growth was registered only 2.2pc during Oct-Dec 2008. Owing to the above factors, it is expected that GDP growth for fiscal years 2008-09 will be around 2.5pc.
The inflation rate as measured by the changes in Consumer Price Index (CPI) stood at 24.4 t per cent during the period Jul-Dec 2008 as against 8.0 per cent in the comparable period last year.
The food inflation is estimated at 31.2 per cent and non-food 19.2 per cent, against 11.6 per cent and 5.4 per cent in the corresponding period of last year. To cope up with the situation, State Bank of Pakistan adopted tight monetary policy where policy rate was adjusted upward to control on aggregate demand in the economy.