ISLAMABAD : Despite growing uncertainty at political and economic fronts, Pakistan showed encouraging economic growth of 5.97 against projected target of 4.8 % in fiscal year 2021-22.
Pakistan Economic Survey for the financial year 2021-22, suggested that the Pakistan’s economic growth remained highly robust making it possible for fragile political system to manage the teasing issues like payments on loans and growing imports of the country in outgoing fiscal year .
Finance minister , Miftah Ismail , Planning and Development minister Ahsin Iqbal , Power minister , Khurrum Dastgir Khan and prime minister’s advisor on Finance , Dr Aisha Ghaus Pasha , released Pakistan Economic Survey at a press conference here on Thursday.
Pakistan Economic Survey 2021-22 has highlighted all those areas where Pakistan showed good performance despite month-long political uncertainty as well as those sectors where Pakistan could not make targeted growth . Pakistan performance many key area remained alarmingly poor. For example its agriculture remained a poor sector due to low yield of a number of crops. Wheat which makes major contribution in the national economy and help make its food basket healthy lost its target by over one million target . Pakistan’s wheat production in the last season remained 26.4 million tons against target of 27.5 milion tons. Less production of wheat than projected target has put Pakistan’s food security at risk. Inavailability of fertilizers to the growers and delay in announcement of support price by the last government played a key role in less wheat production.
Pakistan’s growing population , which according to the last household survey, was slightly over 220 milion needs around 30 million tons wheat in a year . Since Pakistan’s local production has remained less than its requirement the government has to resort to import of around 3 million tons of wheat to meet its consumption in the current wheat year . Similarly, Pakistan ‘s direct invest (FDI) in the outgoing has gone as low as $1.5 billion against its last year’s volume of $2 billion. This is a highly worrisome for Pakistan . Its FDI has almost dried and it should be an area for the government to review its strategy . FDI is a basic indicator to suggest where economy of any country was heading to .
Imports again a highly alarming side of Pakistan’s economy . Although Pakistan made some reasonable growth on exports side where it cross S 29 billion in 11 months of the outgoing financial year , but unhealthy trend in its imports put Pakistan’s economy on a path of virtually destruction imports of $ 50 billion not only widened the current account deficit but also made Pakistan’s payments for imports and other liabilities like debt servicing extremely difficult if not impossible all together .
According to Pakistan Economic Survey 2021-22 , the national economic growth was recorded at 5.97 % against the target of 4.8 %. . Growth of agriculture sector remained 4.40 % against a target of 3.5 %, ; industries posted growth of 7.19 % against the target of 6.5 %, services industry 6.19 %; and services industries recorded 6.19 % growth against target of 4.7 %.
Miftah Ismail said the coalition government will focus in sustainable growth to address Pakistan’s economic growth in 2022-23. Pakistan forecasts 5 % growth in next fiscal year . It also intends to put in place a new tax regime to cut down import bill to a reasonable level to address its perpetual current deficit issue.
Commenting on this economic survey numbers, senior economist Dr Abid Suleri said that a 6% of economic growth is a very good news. However, the bad news is that despite this robust growth, country is in an economic mess today.
“This is not the first time that Pakistan finds itself in an economic mess despite healthy growth. One may argue that economic growth of five-plus percentage points for 2-3 consecutive years ends up overheating Pakistan’s economy. Such overheating turns its CAD unsustainable, resulting in a boom and bust cycle”, Dr Suleri maintained.
“To set the context right, we should remember that 95 per cent of Pakistan’s growth is consumption-led, resulting in low savings and low investment-to-GDP ratio. Eighty-six per cent of consumption comes from households, making them highly vulnerable to any shock or reduced supply of resources. And finally, more than ninety per cent of Pakistan’s growth is imports based, increasing its CAD”, Dr Suleri added while explaining the context of the economic turmoil we face today.