Pakistan’s economy moving on solid growth path

Sources record that for true description of the economic performance of Pakistan, the experts need to compare the performance of economy pre and post Covid-19. Sources also presently record that Pakistan’s economy is on a solid growth path and has potential to boost at a much higher rate upcoming 5-year despite a challenging environment globally. The experts said higher GDP growth in the 5-6 percent per annum range is going to be a new normal in the next 5-year considering major economic indicators. The State Bank of Pakistan (SBP) projects 3 percent GDP growth during FY2021 and 4 percent in FY2022. It is also said that Pakistan will go for an ambitious 6 percent economic growth target in the next 2 years as IMF shows its willingness to renegotiate tough situations for a $6 billion loan in the wake of growing Covid-19 cases. Statistics show that the federal government will earmark as much as Rs 900 billion for development expenditure in the year beginning July. On the other hand, IMF has projected 4 percent GDP growth for Pakistan during fiscal year 2021-22, which starts in July. Pakistan is predicted to post a 1.5 percent expansion during the ongoing fiscal year ending on June 30 after a rare contraction of -0.4 percent previous year. Statistics show that SBP offered Rs 450 billion liquidity under its Temporary Economic Refinance Facility to the private sector to absorb the Covid shock, while another Rs 240 billion was offered as working capital to avoid layoffs and job losses. SBP also offered a Rs 900 billion cushion to banks to ensure relief to distress businesses in deferment and restructuring of principal payment and mark-up charges. These are some of the initiatives which assisted the economy of Pakistan to bounce back quickly to meet worldwide demand after the lockdown period. The Government of Pakistan has also urged the business community to ensure a strict implementation of the standard operating procedures (SOPs) in markets and commercial areas in order to curb the spread of this pandemic.

The third wave of coronavirus had spread to dangerous levels and the condition demanded that the business community play a role in strict compliance with the SOPs in business areas to manage more Covid-19 infections. It is stressed that a reduction in coronavirus cases would assist the present government to consider easing restrictions on businesses. Pakistan is one of the few countries that reduced its fiscal deficit despite the Covid-19 challenge and worldwide economic slowdown through reprioritising spending. Pakistan’s public debt-to-GDP ratio has stayed broadly stable last year while it has risen for most emerging markets because of this pandemic; this has enhanced the country’s creditworthiness. SBP also recorded that the market-based exchange rate system determines the rupee-dollar parity, which stands at around Rs153 presently after hitting an all-time high of 168 last year. It is also said that the poverty alleviation and high food inflation to bring real change in the economy, the Government of Pakistan must resolve this issue through administrative measures to enhance the goods supply chain system. Pakistan does have potential to achieve higher growth in next 5 years.

The country is a nation of 220 million-plus people and every year new earners are now coming into the main stream. Renewable energy is offering everyone a sustainable and cheap energy making lives easier and production cheaper. Moreover, IT, e-commerce, the Internet and cellular sectors have huge potential to drive economy into fast lane and attain much higher GDP growth in next 5 years. High single-digit growth is going to be a new normal in years to come. It is also said that Prime Minister Imran Khan has always resisted lockdown. He always wants such a system that the economy keeps moving so at least the poor segments of society don’t come under pressure. Apart from implementation of the SOPs and guidelines, the Government of Pakistan is energetically pursuing vaccination campaign and through all standards Pakistan’s programme is one of the most organised and effective globally. Within a year, the country’s vaccination programme would attain its major targets.