ISLAMABAD, Aug. 26 (Xinhua) -- The economy of Pakistan is going through high inflationary and external sector pressures due to higher commodity prices, the country's finance division said.
The government is taking all possible measures to counter these pressures so that the growth momentum would remain intact, the finance division said in its monthly economic outlook released on Thursday.
The report said that recent flash floods driven by exceptionally heavy monsoon rains have reduced the potential output of both main and minor Kharif (monsoon sowing season in Pakistan) crops this year, thereby tempering the positive outlook of the agricultural sector.
Highlighting the global scenario, the report said that geo-political tensions remain unabated, worldwide inflation remains high, interest rates show tendencies to rise, and the U.S. dollar strengthens.
It noted that Pakistan's external environment has been facing increasing challenges surrounded by global and domestic uncertainties.
It further added that the government has taken necessary measures to comply with the International Monetary Fund's requirements.
"These have further increased inflation, but also made a positive effect of alleviating the external financing constraints," according to the report. ■
