June 11, 2021: Pakistan's economy rebounded strongly during the current fiscal year and posted a growth of around four percent, which is substantially higher than the previous two years.
Minister for Finance Shaukat Tarin, accompanied by Minister for Industries and Production Khusro Bakhtiyar, Commerce Adviser Razak Dawood, Special Assistant on Poverty Alleviation Sania Nishtar and SAPM on Revenue Waqar Masood, launched Pakistan Economic Survey 2020-21, in Islamabad on Thursday.
According to the Economic Survey, the GDP at the current market price stands at 47,709 billion rupees showing a growth of 14.8 percent over the last year.
The agriculture sector posted a growth of 2.8 percent, industries 3.6 percent and services 4.4 percent. In Industry, Manufacturing recorded 8.7 percent growth on account of significant growth in large scale manufacturing and SMEs. The large scale manufacturing increased by eight point nine percent.
The construction sector recorded growth of 8.3 percent. The IT sector witnessed growth of 18. 85 percent which is the highest growth in comparison with all other industries and the highest in the region.
Shaukat Tarin said FBR collection has seen an increase of eighteen percent as compared to the last year. The revenue collection has so far reached 4.2 trillion rupees, expressing the confidence that it will exceed the target of 4.7 trillion rupees by the end of this financial year.
During the current fiscal year, the total revenue as percent of GDP stood at 15.1 percent whilst total expenditures at 23.2 percent. Thus, fiscal deficit stood at 8.1 percent.
During July-March of this fiscal year, expenditures under the PSDP stood at 653.9 billion rupees.
Shaukat Tarin said remittances grew by 29 percent this year, which shows overseas Pakistanis' trust in Prime Minister Imran Khan. He said the remittances have so far reached 26 billion dollars and these are expected to increase to 29 billion dollars by the close of this fiscal year.
The Survey revealed that Pakistan's exports bounced back after a sharp hit during strict lockdown in the last fiscal year, mainly due to export oriented government policies and strong economic recoveries. By April, exports were amounted to 20.9 billion dollars as compared to 18.4 billion dollars in the same period last year which shows an impressive growth of 13.6 percent.
The imports stood at 44.7 billion dollars during the ten months of current fiscal year as compared to 37.9 billion dollars in the same period last year.
He said the inflow of dollars including through exports helped maintain the current account deficit in surplus over the last ten months.
Foreign Exchange Reserves stood at 22.7 billion dollars in the first ten months of current fiscal year. Out of this, the SBP's reserves were 15.6 billion dollars whereas reserves held with the commercial banks were 7.1 billion dollars. Pakistan's rupee strengthened against the dollar, effectively appreciating the rupee by 9.5 percent.
Shaukat Tarin said the total debt stood at 38 trillion rupees by the end of March this year, including 25 trillion rupees local debt and 12.5 trillion rupees foreign debt. There has been an increase of 1.7 trillion rupees in loan during this period as compared to 3.7 trillion rupees in 2019-20, which shows reduction in loan growth. He said foreign currency debt decreased by 700 billion rupees as compared to the previous year.
The Survey disclosed that health related expenditure increased by 14.3 percent. Under this year's PSDP, allocations of 20,193. 9 million rupees were made for seventy one health sector projects.
The government earmarked 29.5 billion rupees for the Higher Education Commission to implement 144 development projects of Public Sector Universities. The literacy rate in urban areas is 74 percent whilst in rural areas it stands at 52 percent.
In the wake of COVID-19, the government disbursed 179.8 billion rupees as one time emergency cash assistance to 14.8 million beneficiaries who were at the risk of falling into the extreme poverty.
Under Kamyab Jawan Youth program, the government disbursed 8,566 million rupees by April this year for businesses.
The Finance Minister said one billion trees have been planted under Ten Billion Tree Tsunami project.
Shaukat Tarin said the government better managed the Covid-19, which kept the businesses going and confidence high.
Expressing satisfaction over the trends in Pakistan Stock Exchange, he said it has emerged as the best in Asia.
He said there are 182 million cellular phone users and 100 million broadband subscribers in the country.
Shaukat Tarin said it was due to the farsighted and prudent decisions that the country saw economic recovery.
He said incentives were especially given to different sectors, including construction, manufacturing and textiles besides interventions were made in agriculture sector. Bumper crops of wheat, sugarcane and maize gave a push to the agriculture growth.
Shaukat Tarin said the government's stabilization program remained successful but now we will shift to growth. He said we will have to target higher growth to provide job opportunities to the youth.
The Finance Minister said there will be special interventions in the budget to take care of the poor segments of the society and bring improvement in their living standards.
Shaukat Tarin said despite increase in the prices of commodities such as crude oil, palm oil, sugar, wheat and tea in the international market, these have not been fully passed on to the consumers.
Shaukat Tarin said our vision is to make Pakistan food exporter country by supporting the agriculture sector. He said the government is also establishing strategic reserves of major commodities to check their prices.
The Finance Minister said the government is giving importance to better manage the power sector and address the issue of circular debt.
Shaukat Tarin said six SEZs under the CPEC are ready to receive investment. He said we are encouraging the Chinese friends to make their investments in the zones, stressing that bolstering exports is important for the economy.
There has been a significant increase in per-capita income by 36.6 percent since 2018, whereas surge in inflation was 25 percent during this period. Although, prices of commodities have increased due to high inflation in the international market, the purchasing power of consumers is higher than the inflation rate.
After the COVID-19 outbreak, the State Bank of Pakistan proactively reduced the policy rate from 13.25 percent to seven percent, which led to addition of 470 billion rupees into the national economy under interest saving.