Indicators show Pak economy performing well amid challenges

The tax collection exceeded targets, the foreign exchange reserves improved, the large-scale manufacturing performed well whereas there was considerable growth in remittances and exports from the country

Economy on track to achieve set growth target for FY22: Economic Outlook

ISLAMABAD, Jan 25 (APP): Notwithstanding the global economic shocks caused due to Covid-19 pandemic, the county’s economy has performed well as is clearly demonstrated by several macroeconomic indicators.

The overall Gross Domestic Product (GDP) growth, during the fiscal year 2020-21 was recorded at 5.37 percent, the second highest growth in last 14 years, according to National Accounts Committee (NAC).

According to the final numbers approved by the committee, the per capita increased to Rs 266,614 or US$ 1,666 in 2020-21 while the size of the economy reached to US$ 346.76 billion.

During this year, the tax collection exceeded targets, the foreign exchange reserves improved, the large-scale manufacturing performed well whereas there was considerable growth in remittances and exports from the country.

This growth was achieved when rest of the world was encountering massive output contractions as it had shrunk by 8% in India, 10% in United Kingdom 3.7% in United States of America and 6.5% in Iran.

“At a time when the economy of the whole world witnessed negative growth, the Pakistan economy performed well owing to prudent policies introduced by the government,” President Islamabad Chamber of Commerce and Industry (ICCI), Shakeel Munir told APP.

The economic indicators that performed well and contributed in positive outcome of GDP included remittances, which piled up to record level to US$29.4 billion, from US$23.1billion year earlier.

The federal taxes registered a record growth in FY21 and came almost Rupee one trillion more than 2018 level at Rupee 4,764 billion. Similarly, the growth in non-tax revenue witnessed a massive increase to Rupee 1,630 billion, according to report by Finance Ministry.

The Large Scale Manufacturing (LSM) during the fiscal year 2020-21 grew by 14.85 percent as compared to the corresponding period of last fiscal year.

On external sector, the finance ministry’s report added, remittances and exports were above than pre-Covid level of 2019-20 while current account deficit posted 10 years low of US$1.9bn in FY21.

Exports of goods came in at $25.6bn, up 14% higher in FY21, it said adding that for the first time in the last ten years, exports indicators are looking promising and the average monthly exports now targeting US$3bn from US$2bn as in the tenure of last government.

Exports of services also increased by 10% to US$5.9bn while IT sector exports have doubled from PMLN time and expected to reach US$3.5bn to US$4bn, up 300% by the end of this government’s term.

Pakistan’s macroeconomic performance has also been widely accepted by all international macro-economic Financial Institutions Including International Monetary Fund (IMF), World Bank, Asia Development Bank (ADB), Moody’s, S&P and Fitch etc.

The Economist’, Pakistan has been ranked number one in the ‘Economists’ world normalcy index as the country has lifted most of its COVID-19 restrictions imposed to curb the virus spread.

“The performance of economy reflected the good management of the government,” Member of Prime Minister’s Economic Advisory council, Abid Qayyum Suleri, who is also Executive Director of Sustainable Development Policy Institute (SDPI) told APP.

“The good management helped to improve trade and remittances,” Suleri said adding that Pakistan was also successful in gaining confidence of IMF and World Bank.

Unlike in the past, the incumbent government managed to bring the sustainability to macroeconomics as the economy has displayed unprecedented resilience, which is unprecedented in the 74-year history of Pakistan, the finance ministry report said.

In past, the country’s boom-bust life cycle appeared cyclical than sustainable as reflected from past global commodity, political or economic shocks of 1998, 2009, and 2018, where economy got busted in very short interval of time.