“The MPC was of the view that, based on currently available information, the existing monetary policy stance strikes an appropriate balance between managing inflation and maintaining growth in the wake of the floods,” it said in a press release.

Floods triggered by heavy rains have killed more than 1,600 people, the National Disaster Management Authority said. Pakistan has appealed to the international world to support it in dealing with flood damages.

“Based on currently available info, growth could fall to around 2% in FY23, compared to the previous forecast of 3-4%,” it said, “despite lower demand-side pressures, higher food prices could raise average headline inflation in FY23 somewhat above the pre-flood projection of 18-20%.”

It added that the current account deficit in FY23 was expected to remain close to the previously forecast 3% of GDP, 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.