The State Bank Governor’s Annual Report for FY2023 describes the state of the economy as “cautiously optimistic.” During the current fiscal year, it anticipates that headline price inflation would decline, the current account deficit will close, and GDP will grow. The paper cautions that this view is dependent on the lack of unfavourable shocks from geopolitical tensions, unanticipated climatic occurrences, and unfavourable changes in global commodity prices. Apart from that, the bank projects that GDP would increase by 2–3%, inflation will drop to 20–22 percent, and the current account deficit will close to 0.5–1.5 percent of GDP. Without a question, fiscal policy plays a crucial role in both our rising inflation and balance-of-payments crisis; the bank cannot fully escape its responsibility. After the elections in February, the newly elected administration will begin its tenure with a heavy task ahead of it.
