Amid swaying situation, economy sticks to growth path

Amid swaying situation, economy sticks to growth path

By Ashraf Wani & Shams-ur-Rehman

ISLAMABAD, Mar 20 (APP): Amid the current swaying political situation at home and challenges faced at external front, one thing that is certainly encouraging is the growth of economy as demonstrated by positive progress of various economic indicators, owing to prudent policies introduced by the incumbent government.

The indicators, including large-scale manufacturing (LSM), agricultural production, revenues, exports, remittances and foreign exchange reserves, have shown considerable growth at a time when the global economies were not performing well.

“The Pakistan economy has performed well in crisis time created due to Covid-19 pandemic and problems in global supply chain. Many sectors of country’s economy have performed well in these challenging times,” said Dr. Abid Qayyum Suleri, Executive Director, Sustainable Development Policy Institute (SDPI) while talking to APP.

He was of the view that Covid-19 had affected global economy. Like other parts of the globe, Pakistan was also affected by problems in supply chain and increasing oil prices which triggered inflation.

However, he expressed the hope that the inflation would come down gradually when supply chain starts restoring.

During the last eight months of current fiscal year (CFY), revenue collection witnessed a record increase and reached to Rs 3,799 billion, exceeding the target set for the period by Rs 268 billion. This represented a growth of about 30.3% over the collection of Rs. 2,916 billion during same period of last year.

Likewise, the large industry expanded by 7.6 percent during the first seven months of the current fiscal year whereas on year-on-year basis, it increased by 8.2 percent during the month of January 2022 and witnessed growth of 4.2 percent on month-on-month basis, according to Pakistan Bureau of Statistics (PBS).

The government had recently announced industrial package, providing special initiatives for investments in this sector with an objective to expand this sector for job creation and bolster economic development.

Meanwhile, the remittances during the first eight months of CFY stood at $ 20.1 billion, showing growth of 7.6 percent compared to the same period last year. With $2.2 billion of inflows during February 2022, workers’ remittances continued their strong performance and have remained above $2 billion since June 2020, State Bank of Pakistan (SBP) reported.

The exports from the country witnessed an increase of 25.88 percent during the first seven months of the current fiscal year (2021-22) as compared to the corresponding months of last year, according to PBS. The exports from the country were recorded at $20.547 billion during the year against the exports of $16.323 billion last year.

“Increase in exports and remittance is good development so is the case with growth in textile sector,” Economist and Analyst Shahid Siddique told APP.

On external side, the Current Account posted a deficit of $ 11.6 billion for July-January FY2022 as against a surplus of $ 1.0 billion last year. Current account deficit widened due to constantly growing import volume of energy and non-energy commodities, along with a rising trend in the global prices of oil, COVID-19 vaccines, food and metals.

The fiscal deficit was contained at 2.1 percent of GDP during the first half of current fiscal year, the primary balance, on the other hand, remained in surplus of Rs 81.1 billion during July-December FY2022, compared to Rs 337.2 billion in the previous year.

The agricultural sector of the country had also performed very well during previous fiscal year and is expected to stay up to the mark during the current year.

During the last year all major crops of Kharif season including cotton, rice, maize and sugarcane witnessed significant growth and surpassed production targets. During this period, cotton output increased by 10.8%, sugarcane 8.7% and rice production by 5.8%, according to official data.

The economic experts are of the view that the country’s economy is on growth path. “The international rating agencies have appreciated policies of Pakistan during and after Covid-19 pandemic, which is an indication of good policies,” Sulheri added.

Meanwhile, taking to the news agency, Economist and Analyst, Shahid Siddique said that the export-oriented policies adopted by the government would have long-term positive effect on exports of the country.

He also termed inflation as a global issue and highlighted the need for devising long term policies for creating a more conducive environment for business.