KARACHI: Pakistan’s central bank has estimated economic growth for the current fiscal year of up to four percent, surpassing forecasts by international agencies.

The State Bank of Pakistan (SBP) announced its forecast in its belated annual report reviewing the fiscal year ended June 30, 2013.

“SBP projects GDP growth in the range of 3-4 percent for FY14 which is higher than the IMF’s growth forecast of 2.5 to three percent,” the bank said.

The International Monetary Fund (IMF) approved a $6.7 billion loan package for Pakistan in September last year, subject to strict economic reforms, particularly in its troubled energy sector and tax system.

The central bank forecast that the three-year deal should bring stability to the domestic foreign exchange market during the current fiscal year.

In the last fiscal year Pakistan’s economy grew at 3.6 percent, the bank said, and inflation fell to single digits.

But it warned inflation could rise as high as 11 percent in the current fiscal.

Economists say growth needs to be seven percent to absorb the country’s booming population.

Pakistan’s main stock exchange closed higher, with the benchmark 100-share index of the Karachi Stock Exchange rising 0.64 percent, or 171.09 points, to 26,761.78.

Main interest was seen in oil stocks as 9 out of 12 listed companies closed for the day in green zone. Moreover, additional Interest was seen in Engro Corp. as the stock gained momentum on the news of listing of Engro Fertilizers that will take place on Friday. dealer said

Engro Corporation Ltd. rose 1.04 percent to 167.80 rupees while Byco Petroueum Pakistan Ltd. was up 3.72 percent to 9.21 rupees.

The rupee ended at 105.39/105.44 against the dollar compared to Monday’s close of 105.51/105.56.

Overnight rates in the money market fell to 8.25 percent from Monday’s close of 8.50 percent.