Over the first six months of the current fiscal year, almost all the major targets set for FY2007-08 by the current Caretaker Government (CTG) came under serious test. Two successive floods, cyclone Sidr, global market situation, domestic inflation and the consequent impact on investment and business scenarios have raised serious concerns as to whether the macroeconomic targets set for FY2008 could be achieved. Whilst forex reserves, remittance flow, revenue collection by the National Board of Revenue (NBR) and stock market performance give some hope, there are alarming developments in the area of prices, export and investment undermining the prospects of achieving the Gross Domestic Product (GDP) target for FY2008.
In view of the above, the present report focuses on three major areas: (a) analysis of the performance of major macroeconomic correlates during the first six months of the current fiscal year (depending on data availability); (b) outlook for the prospects of achieving the targets set for FY2008; and (c) some of the major challenges facing the CTG as it moves toward the dead line set for holding the national elections by the end of 2008.