By Ashraf Wani & Shams Abbasi
ISLAMABAD, Jan 09 (APP): Despite several challenges on the internal and external fronts, the Pakistan Tehreek-e-Insaf (PTI) government has successfully managed to bring sustainability to macroeconomics as it was indicated by the unprecedented resilience of economy during the last couple of years.
Economic experts believe that the economy of Pakistan is resilient despite the economic shocks caused due to COVID-19 and the recent multi-decade high-price commodity shock.
“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.
Finance Ministry in a recently published report said that Pakistan boom-bust life cycle appeared cyclical than sustainable in past as has been reflected from past global commodity, political or economic shocks of 1998, 2009, & 2018, where economy got busted in very short interval of time. However, the incumbent government put the economy on right path to ensure sustainable growth.
The ICCI President attributed the good economic performance to the excellent management by the government during the pandemic period, which is leading the economy to grow at around 5 percent of GDP during the current fiscal year. Last year, the economy performed above expectations as the GDP growth was witnessed at four percent, tax collection exceeded targets, reserves improved, current account reported lowest since 2011.
This growth was achieved when rest of the world was encountering massive output contractions. The growth in India during that period contracted by eight percent, in United Kingdom by 10 percent, United States of America by 3.7 percent and in Iran 6.5 percent.
The ICCI President said, “The initiatives taken by the State Bank of Pakistan for business community helped in generating economic activity and thereby led to export growth. All other sectors of economy also showed good performance as revenues and remittances witnessed considerable growth whereas the construction sector also boomed along with forty allied industries.”
It is pertinent to mention here that the remittances have piled up to record level to US $ 29.4 billion, from US $ 23.1 billion year earlier whereas the federal taxes registered a record growth in FY21 and came almost Rs one trillion more than 2018 level at Rs 4,764 billion. Similarly, the growth in non-tax revenue witnessed a massive increase to Rs 1,630 billion.
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. Likewise, the government’s response to the pandemic had been widely acclaimed and recognized.
According to 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,” said member of the Prime Minister’s Economic Advisory Council, Abid Qayyum Suleri, who is also Executive Director of Sustainable Development Policy Institute (SDPI).
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 $ 1.9 billion in FY21.
Export of goods came in at US $ 25.6 bln, up 14 percent 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 $ three bln from US $2 bln as in Pakistan Muslim League-(Nawaz) (PML-N) time.
Export of services also increased by 10 percent to US $ 5.9 bln while IT sector exports have doubled from PML-N time and expected to reach US $ 3.5 bln to US $ 4 bln, up 300 percent by the end of this government’s term.
“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. He said, though there was growth in overall exports, the textile sector performed well.