The Monetary Policy Committee (MPC) decided to maintain the policy rate at 15 percent. Based on currently available info, growth could fall to around 2% in FY23, compared to the previous forecast of 3-4%. Despite lower demand-side pressures, higher food prices could raise average headline inflation in FY23 somewhat above the pre-flood projection of 18-20%.
With pressures from higher food and cotton imports and lower textile exports largely likely to be offset by slower domestic demand and lower global commodity prices, the current account deficit in FY23 is expected to remain close the previously forecast 3% of GDP.
