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Economy bounces back along with a 4 percent growth: Economic Survey

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ISLAMABAD: Pakistan’s economy bounced back strongly during the current fiscal year 2021-21 and posted a growth of around four percent, which is substantially higher than the previous two years.
This was stated by Finance Minister Shaukat Tarin, who accompanied by Minister for Industries and Production Khusro Bakhtiyar, Adviser to the PM on Commerce Abdul Razak Dawood, Special Assistant on Poverty Alleviation Sania Nishtar and SAPM on Revenue Waqar Masood launched Pakistan Economic Survey 2020-21 on Thursday.
According to the Economic Survey, the gross domestic product (GDP) at the current market price stands at Rs47,709 billion 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 sector recorded 8.7 percent growth on account of significant growth in large-scale manufacturing (LSM) and small and medium enterprises (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 that Federal Board of Revenue (FBR) collection has seen an increase of 18 percent as compared to the last year. The revenue collection has so far reached Rs4.2 trillion rupees, expressing the confidence that it will exceed the target of Rs4.7 trillion 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, the fiscal deficit stood at 8.1 percent.
During July-March of this fiscal year, expenditures under the PSDP stood at Rs653.9 billion.
Shaukat Tarin said that 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 and these are expected to increase to $29 billion 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 amounted to $20.9 billion as compared to $18.4 billion in the same period last year which shows an impressive growth of 13.6 percent.
The imports stood at $44.7 billion during the first ten months of the current fiscal year as compared to $37.9 billion 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. The foreign exchange reserves of the country stood at $22.7 billion in the first 10 months of the current fiscal year. Out of this, the SBP’s reserves were $15.6 billion whereas reserves held with the commercial banks were $7.1 billion. Pakistan’s rupee strengthened against the dollar, effectively appreciating the rupee by 9.5 percent.
Shaukat Tarin said the total debt stood at Rs38 trillion by the end of March this year, including Rs25 trillion local debt and Rs12.5 trillion foreign debt. There has been an increase of Rs1.7 trillion in loans during this period as compared to Rs3.7 trillion in 2019-20, which shows reduction in loan growth. He said foreign currency debt decreased by Rs700 billion 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 Rs20,193.9 million were made for seventy-one health sector projects.
The government earmarked Rs29.5 billion 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 Rs179.8 billion as one time emergency cash assistance to 14.8 million beneficiaries who were at the risk of falling into extreme poverty.
Under the Kamyab Jawan Youth programme, the government disbursed Rs8,566 million by April this year for businesses.
The finance minister said one billion trees have been planted under the Ten Billion Tree Tsunami project. He 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 (PSX), 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.
Tarin said it was due to the far-sighted and prudent decisions that the country saw economic recovery. He said that incentives were especially given to different sectors, including construction, manufacturing and textiles, besides interventions were made in the agriculture sector. Bumper crops of wheat, sugarcane and maize gave a push to agricultural growth.
Tarin said, “The government’s stabilisation programme remained successful but now we will shift to growth. 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. He said despite the 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.
Tarin said, “Our vision is to make Pakistan a 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. He said that 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 the surge in inflation was 25 percent during this period. Although, prices of commodities have increased due to high inflation in the international market, yet the purchasing power of consumers is higher than the inflation rate, he said.
After the Covid-19 outbreak, the State Bank of Pakistan pro-actively reduced the policy rate from 13.25 percent to seven percent, which led to addition of Rs470 billion into the national economy under interest saving.
Earlier in the day, Finance Minister Shaukat Tarin called on Prime Minister Imran Khan and presented him with the Pakistan Economic Survey 2020-21. Special Assistant on Revenue Waqar Masood was also present on the occasion. – TLTP