ISLAMABAD: The government’s economic team headed by Finance Minister Ishaq Dar told Prime Minister Shehbaz Sharif on Thursday while presenting the Economic Survey 2022-23 that there is no quick fix, but the decline of the economy has been stopped and the risk of default has been averted.
He maintained his argument, however, that the rupee’s real value is in the 240s against the dollar
“We have stopped the decline of the economy and have prevented Pakistan from default. Now our objective is 3.5% growth for next year,” said Dar. “The baseline is core inflation, which is in the range of 16-20%. The world over the core inflation is followed and not the headline inflation,” he added.
Unveiling the Economic Survey, the finance minister said that the fiscal year 2022-23 was a difficult year for the economy. There are 17 chapters in the economic survey on different sectors of the economy. The report discusses in detail sectoral, socio-economic development, agriculture, manufacturing, energy, IT, capital market, health, education and transport sectors.
“Pakistan was the 24th largest economy in 2017, but has now dropped to the 47th position,” said Finance Minister Ishaq Dar, adding that, “For the restoration of the economy, we have made a plan, our objective is to restore macroeconomic stability, we need to bring it back to what it was in 2017.”
Higher international commodity prices (crude oil, edible oil, pulses etc), global supply disruptions, damages of major and minor crops due to flood, currency depreciation, administrative price adjustment and political uncertainty are major factors responsible for high inflation, said Finance Minister Ishaq Dar on Thursday.
The Pakistan Stock Exchange’s (PSX) market capitalisation in 2017 was $100 billion.
“For inclusive and resilient growth, we need a resilient economy,” he said.
According to the finance minister, the government is working on five Es – exports, equity, empowerment, environment and energy.
“The economic downfall has stopped,” said Dar, “We are working to restore economic activity now.”
Circular debt increased per annum was Rs129 billion in our previous government compared to Rs330 billion during FY2019-22, he said. The total public debt rose from Rs 25 trillion in June 2018 to Rs 49.2 trillion in June 2022, representing a significant increase of 97%.
“Under the governance of the PTI (Pakistan Tehreek-e-Insaaf) party, the total debt during their tenure surged from Rs 29.9 trillion in FY2018 to Rs 59.8 trillion, marking an approximate doubling of the debt (nearly 100% increase),” lamented the finance minister. He said that the final nail in the economical coffin was when commitments were not kept after the vote of no confidence.
Discussing the previous government’s performance, Dar said that fiscal deficit increased from 5.8% in FY2018 to 7.9% of GDP in FY2022, trade deficit worsened to $39.1b from $30.9b in FY2018, circular debt increased from Rs1,148b to Rs2,467b, public debt increased from 63.7% to 73.9% of GDP and total public debt increased from Rs25 trillion in June 2018 to Rs49.2 trillion in June 2022 (a 97% increase).