ISLAMABAD: June 8, 2023: Pakistan has missed all key targets ranging from inflation to economic growth in 2022-23 due to fast erosion of the rupee and rising inflation in the outgoing fiscal year.
Finance minister , Ishaq Dar, announced an economic survey 2022-23 , at a press conference held here on Thursday. The economic survey unveiled by the Finance minister, Ishaq Dar, has painted an extremely poor picture of Pakistan’s economy in the outgoing fiscal year (2022-23).
At the outset of his presentation , Mr Ishaq Dar presented the list of factors which, in his views, have damaged Pakistan’s economy in the recent years. Mr Dar said he had left a robust economy of Pakistan in 2017 in the rule of Mian Nawaz Sharif and then a successor government ruined the national economy for its petty politics.
According to the minister, Pakistan Gross Domestic Product (GDP) growth remained meager at 0.29 % in outgoing fiscal year against its ambitious target of 7.1 %. The economic survey shared by Mr Ishaq Dar with the media at the press conference suggested that Pakistan missed GDP growth with a wide margin , leaving the entire policy making and economic strategy of the Pakistan Democratic Movement (PDM) government in total disarray. PDM failure on economic front has put Pakistan into shambles . Its direct impact has come on the public at large which is braving unparalleled inflation since coming in of PDM government in April 2022.
PDM government seems in total mess for the last one year or so. Its economic team first led by iconic economic wizard , Miftah Ismael and now by Ishaq Dar, known as Pakistan’s economic hitman , has failed miserably in delivering something good to the state and people of Pakistan.
PDM government is living on domestic loans.
According to the released economic survey , Pakistan inflation remained all time high in its 75-year history pushing a good percentage of its people below the poverty line. A large number of the people of Pakistan, in particular, low income group, is facing hardest time due to rising inflation in Pakistan. The economic survey suggested that during the first 10 months of 2022-23, Pakistan’s inflation rate was recorded at 29.2 percent against its target of 11.3 percent. The survey said the rising cost of pricy imports and fast depreciation of the rupee stoked inflation in Pakistan during 2022-23.
FBR collection in 2022-23
The Federal Board of Revenue (FBR) has collected Rs 6210 billion in the first 10 months of the outgoing fiscal year. This shows robust increase in revenue collection over the last fiscal year. The survey suggested that FBR had collected Rs 5348 billion during the same period of the last fiscal year. The collection is the only area where despite ragging economic crisis Pakistan performed satisfactorily. Pakistan had set a target of 7404 billion revenue collection for the outgoing fiscal year. With only two months data to add to total of collected revenue Pakistan has to collect around 1200 billion more tax. This figure is almost unachievable. Pakistan will certainly miss the real tax collection target of the outgoing fiscal year. But given the nature of the economic crisis , the revenue collected so far of Rs 6210 billion during July 2022 and May 2023 is satisfactory.
Trade deficit
The survey document shows that Pakistan’s exports declined by 9.9pc during July to March to $ 21bn compared to $23bn in the same period last year.
The imports during the same period amounted to $43.7bn compared to $58.9bn in the same period last year, reflecting a decline of 25.7pc. This reduction came primarily because of policy tightening and other administrative measures as the government sought to protect its depleting foreign exchange reserves.
As a result, the country’s trade deficit significantly shrank to 6pc of GDP, compared to 10.4pc from last year.
Current account.
The current account balanced improved by 74.1pc, recording a deficit of $3.4bn during Jul-Mar FY2023, against a deficit of $13bn in the year-ago period.
This led to the current account deficit shrinking to 1pc of the GDP, compared to 4.7pc during the same period last year.
“The predominant factor behind this improvement was the 29.7pc decrease in the merchandise trade deficit on the back of substantial decline in import payments to $41.5 billion in Jul-Mar FY2023 from $ 52.7 billion last year,” the document notes.