Daily Times

ISLAMABAD: Despite a myriad of challenges, the economy has been moving progressively on a higher inclusive and sustainable growth path on the back of multiple measures and achievements during the current fiscal year, witnessing a rate of 3.94 percent, according to the Pakistan Economic Survey 2020-21 revealed by Finance Minister, Shaukat Tarin.

“The economy of Pakistan rebounded strongly in FY2021 and posted growth of 3.94 percent, which is not only substantially higher than the previous two years (-0.47 and 2.08 percent in FY2020 and FY2019 respectively) but also surpassed the target (2.1 percent for FY2021),” the survey said.

Despite strict fiscal constraints, timely and appropriate policy measures taken by the government resulted in a V-shaped economic recovery, it added.

The manufacturing witnessed broad-based growth as major sectors of Large Scale Manufacturing (LSM), including textile, food beverages & tobacco, non-metallic mineral products and automobile showed significant improvement.

The sector recorded the highest period wise growth of 8.99 percent in the first nine months of FY2021 since FY2007.

The Current Account posted a surplus of $ 0.8 billion, during July-April in FY2021 for the first time in 17 years while the inflows of foreign exchange through the Roshan Digital Account (RDA) crossed the $1 billion mark.

During July-April FY2021, workers’ remittances posted historically high growth of 29 percent and reached $ 24.2 billion while the State Bank of Pakistan’s foreign exchange reserves rose to $16 billion, a four-year high.

Keeping in view the significant performance pertaining to the Financial Action Task Force (FATF) conditions, potential of exports and e-commerce, Pakistan had been added into the Amazon’s sellers list.

The Federal Board of Revenue (FBR) tax collection witnessed a significant growth of around 18 percent during July-May FY2021 owing to the revival of domestic economic activity, and ongoing comprehensive tax policy and administrative reforms.

Primary balance remained in surplus at 1.0 percent of GDP (Gross Domestic Product), the highest level through the first three quarters in 12 years while on May 27, 2021, the Pakistan Stock Exchange (PSX) witnessed an all-time high daily trading volume with 2.21 billion shares traded in a single session, according to the survey.

Due to its impressive growth, the PSX earned the title of being the best Asian stock market and fourth best-performing market across the world in 2020.

According to the survey, the profile of domestic debt had improved significantly during the tenure of the present government as short-term debt, as percentage of total domestic debt, had decreased to 23 percent at end March, 2021 compared with 54 percent at end June, 2018.

Over 80 percent of the net borrowing from domestic sources was through medium-to-long term domestic debt instruments (Pakistan Investment Bonds & Government Ijara Sukuk) during the first nine months of FY2021.
Pakistan entered the international capital market after a gap of over three years by successfully raising $ 2.5 billion through Euro bonds while the policy rate remained unchanged at 7.0 percent, which improved business sentiments and thus stimulating economic activities enabling employment to recover.

During July-February FY2021, the two gas utility companies (SNGPL & SSGCL) laid 143 Km gas transmission network, 2,616 Km distribution and 886 Km services lines, and connected 70 villages/towns to the gas network.

During the same period, 304,573 additional gas connections including 303,243 domestic, 1,020 commercial and 310 industrial connections were provided across the country.
According to the survey, the installed capacity of electricity increased to 37,261 megawatt during July-April FY2021 as compared to the same period last year, showing an addition of 1,289 MW.

Likewise, its generation increased to 102,742 GWh showing an additional generation of 6,360 GWh during the period under discussion. The share of industry in electricity consumption increased to 26.3 percent in July-March FY2021 as compared to 25.5 percent in the same period last year.

Cellular mobile subscribers (number of active SIMs) in Pakistan reached 182 million at the end of March, 2021 as compared to 167.3 million by the end of June, 2020 showing an increase of 8.6 percent in nine months of FY2021.

At end March, 2021 broadband (BB) subscribers reached 100 million. The total BB penetration in Pakistan stood at 47.6 percent in March, 2021 registering an increase of about 19.7 percent as compared to end March, 2020.

Under the Ehsaas Emergency Cash Programme, Rs 179.3 billion had been disbursed. Approximately 14.8 million families benefited from the programme. The World Bank recognized the Cash Programme among top four social protection interventions globally in terms of number of people covered.

Under the Kamyab Jawan Youth Entrepreneurship Scheme, Rs 8,566 million had been disbursed till April, 2021 to the youth for various businesses.

The 10 Billion Tree Tsunami programme achieved plantation of approximately 350 million plants during July-March FY2021, with about 100,000 daily wagers employed. Cumulatively, over 800 million plants had been planted in last two years.

The International Monetary Fund (IMF) acknowledged that the government’s policies had been critical in supporting the economy, and saving lives and livelihoods. The IMF and Pakistan announced the resumption of stalled $ 6 billion loan programme.

During the year, all three major credit rating agencies, Moody’s, Fitch and Standard & Poor’s, reaffirmed their sovereign credit ratings for Pakistan.

“This reaffirmation is reflective of the sound policies of the government and of the confidence reposed by these leading international institutions in the country’s economic outlook,” the survey noted.

It said Pakistan was implementing a stabilization policy post the crisis of 2017-18 and the economy was recovering from macroeconomic imbalances but COVID-19 slowed down the pace, which was recovered initially but the advent of 2nd and 3rd waves brought significant challenges which were met by the timely prudent policies.

“Pandemics like COVID-19 are once-in-a-century event that devastate global economies. Pakistan did much better in coping up with the pandemic compared to many countries,” the survey added.

The government, it said, took several important policy decisions: monetary and fiscal measures, smart lockdowns as well as rapid vaccination. The National Command and Operating Centre (NCOC) as a single organization was made responsible to take key decisions in collaboration with the provinces. The situation was put under control due to the government’s timely decision making as numbers of daily COVID-19 cases were presently on declining trend, the survey added.

It said prior to COVID-19, the working population was 55.74 million, and the number declined to 35.04 million, which indicated that the people either lost their jobs or were not able to work. Due to prudent decisions by the government, working population reached 52.56 million till October, 2020.