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Pakistan’s economy is moving progressively on a higher inclusive and sustainable growth path on the back of various measures and resultant achievements despite a myriad of challenges.
Pakistan implemented a policy of stabilization following the national economic crisis of 2017-18 and the economy recovered from macroeconomic imbalances, but the coronavirus (COVID-19) pandemic slowed down the pace. The economy recovered initially but the second and third waves of the virus posed serious challenges, which were met by the incumbent federal government with its timely prudent policies.
The national economy of Pakistan already had a volatile growth pattern over the years marked by regular boom-and-bust cycles, which posed challenges in achieving long-term and inclusive growth. Against the backdrop of a host of challenges, the present government focused on an economic vision of securing sustainable economic growth through improved efficiency, reduced cost of doing business, better regulatory environment, enhanced productivity, and increased investment.
During the past three years of the incumbent federal government, it had faced numerous economic challenges which were somehow aggravated by the pandemic. However, the federal government has quite successfully progressed from recovery and stabilization of the national economy to its sustainable growth.
The impact of the federal government’s timely and appropriate measures is very much visible in the form of an economic recovery on the back of broad-based growth across all sectors.
Some other achievements reported over the past year include:
Pakistan’s gross domestic product (GDP) rate was estimated to be 2.9 percent against the targeted growth of 2.1 percent through the policy initiatives.
Besides extending the economic stimulus for the fiscal year in 2021, an amount of Rs155 billion was also released to mitigate the socio-economic impacts of the pandemic.
Home remittances by overseas Pakistanis grew significantly.
The current account balance showed improvement.
The country’s exports also showed an appreciable turnaround.
Furthermore, the World Bank recognized the Ehsaas Emergency Cash Program as being among the top four social protection interventions in the world in terms of the number of people it covered. The International Monetary Fund (IMF) also said government policies have been crucial in supporting the national economy during the COVID-19 pandemic.
In alignment with Sustainable Development Goals (SDGs), the federal government is placing a high emphasis on poverty alleviation through urban development, affordable housing, access to mass media, and more. According to the Ministry of Finance, the government has invested in 17 sectors that aim to alleviate poverty.
Social protection has a central role to play in addressing the social, economic, and health dimensions of the COVID-19 crisis.
Pakistan’s largest social protection initiative, Ehsaas, includes more than 260 policies. The Ehsaas Emergency Cash Program provided Rs 179.8 billion to more than 15 million families across Pakistan. The Ehsaas Roshan Portal linked donors from the private sector and civil society organizations with beneficiaries in need of basic food.
For this coming fiscal year, expect improvements in the global economy as the pandemic will subside with the expansion of the COVID-19 vaccine rollout. There is an anticipation of favorable weather conditions as the GDP is targeted to grow at 4.8 percent. The agriculture sector is likely to grow by 3.5 percent based on the revival of cotton, water availability, certified seeds, fertilizers, pesticides, and agriculture credit facilities.
The industrial sector is expected to maintain its momentum and is targeted to grow at 6.2 percent. This forecast is based on sustained large-scale manufacturing, a collateral-free credit guarantee scheme, and construction with spillovers in allied industries. The service sector is also set to grow by 4.7 percent on the back of the envisaged growth in the agriculture and industry sectors.
On the fiscal and monetary front, average inflation is targeted to remain within 8 percent on the basis of expected adjustments in energy tariffs while high global food and commodity prices may stay high.
On the external front, imports are expected to grow significantly by 9.5 percent. However, the robust growth in home remittances (10 percent) and modest growth in exports (6.5 percent) are likely to offset the imports. Thus, the current account deficit is projected to remain around 0.7 percent of the GDP. However, building capabilities and providing opportunities through public investment will alleviate widespread unemployment in the country and sustain the national economy’s growth momentum.
With a number of socio-economic initiatives being pushed with the aim to maintain national economic growth, the Pakistan government is determined to expand the social protection network to cover a maximum number of vulnerable segments in the society. The country’s economy is moving forward from stability to growth as there are signs of hope and progress.
• Mohammed Zahid Rifat is Lahore-based freelance journalist, columnist, and retired deputy controller (news) at Radio Pakistan, Islamabad.