ISLAMABAD – The Economic Survey for 2019-20 reveals seventy three percent decline in current account deficit, bringing it down from 20 billion dollars to three billion dollars.
The survey was launched by Advisor on Finance Dr. Abdul Hafeez Shaikh at a news conference in Islamabad today (Thursday).
The Advisor said fiscal deficit has been curtailed to four percent of the GDP from 5.1 percent of previous year.
Abdul Hafeez Shaikh said due to the negative impact of COVID-19, GDP growth rate for outgoing fiscal year is estimated at a negative 0.38 percent.
Giving a break up, the adviser said the agriculture sector recorded strong growth of 2.67 percent considerably higher than 0.58 percent growth achieved during the last year.
The provisional growth in industrial sector has been estimated at minus two point six four percent mainly due to the negative growth of 8.82 percent in mining and quarrying sector and decline of 7.78 percent in large scale manufacturing sector. Due to lockdown situation in the country, the growth estimates of small scale industry for the outgoing fiscal year are 1.52 percent.
The services sector has declined provisionally at 0.59 percent mainly due to 3.42 percent decline in wholesale and retail trade sector and 7.13 percent decline in transport, storage and communication sectors.
Finance and insurance sector witnessed a slight increase of 0.79 percent.
The Housing Services, General government services and other private services have contributed positively at 4.02, 3.92 and 5.39 percent respectively.
During the first seven months of fiscal year, inflationary pressures were observed and inflation rose to 14.6 percent in January this year. However, due to government’s timely measures, the Consumer Price Index declined to single digit at 8.5 percent in April this year. This was third successive month showing decline in inflation, whereas it dropped more than six percent in last three months.
The total imports during the first ten months of the outgoing fiscal year declined to 36.1 billion dollars as compared to 40.3 billion dollars last year, registering a decline of 16.9 percent. During the first ten months, remittances also increased to 18.8 billion dollars as compared to 17.8 billion dollars during the same period previous year.
Media Briefing by Advisor on Finance and Revenue
Advisor on Finance and Revenue Dr. Abdul Hafeez Shaikh says the government will provide further relief in the upcoming budget to equip different segments of the society to better deal with COVID-19.
He said no new tax will be imposed rather the existing ones will be reviewed and cut.
The Advisor said more funds will be allocated for the social safety nets and economic incentives will be provided to the industries to cope with the prevailing difficult times.
Abdul Hafeez Shaikh said COVID-19 impacted economy of the entire world, and according to IMF forecast, the world’s income is expected to reduce by three to four percent.
He said the economic stability under the present government was badly affected by the breakout of the pandemic. He said the government made utmost endeavour to protect the economy and the people from its adverse impact.
The Advisor said the PTI government took a number of steps, including giving incentives to businesses to increase exports, reducing current account and fiscal deficits.
The Advisor said 5000 billion rupees loan was paid back during one year. He said the PTI government secured loans to pay back loans of the previous governments.
He said tax collection witnessed an increase of 17 percent before the outbreak of COVID-19. However, he said, due to the negative impact of Coronavirus pandemic, the FBR tax collection is expected to remain 3900 billion rupees instead the targeted amount of 4700 billion rupees.
Abdul Hafeez Sheikh said the government pursued a strict austerity drive and reduced its expenditures, which resulted in surplus primary balance. He said no supplementary grant was given to any government department during the outgoing fiscal year.
The Advisor said the government offered two types of packages in view of the impact of the Coronavirus pandemic.
He said the funds for social safety net were almost doubled from 100 billion rupees to 192 billion rupees.
He said a stimulus package worth 1250 billion rupees was announced to provide financial assistance to the people affected by the pandemic. He said under another package, the small businesses were given incentives through State Bank of Pakistan.
He said the government decided to provide cash assistance to 16 million people, and so far, about ten million people have been given the assistance.
Speaking on the occasion, Advisor to Prime Minister on Commerce Abdul Razzak Dawood said earning dollars through exports is vital for bringing economic stability.
He said we have offered our exporters same rates that were available to their regional competitors in order to help them compete.
He said in February this year, our exports increased by 14 percent comparing with the same period last year.
The Advisor expressed optimism that new shipments of limestone to China have just started which will bring positive addition.
Giving details on the flagship Ehsaas Program of the government, Prime Minister’s Special Assistant on Social Protection, Dr. Sania Nishtar said an amount of over 190 billion rupees was fairly distributed among poor segments of the society.
She said keeping in the elements of transparency and no political interference, the social safety system was reformed through innovations.
Speaking on the occasion, Minister for Economic Affairs Khusro Bakhtiar said the country’s external debt stands at 76.5 billion dollars.
He said the Prime Minister’s debt relief call for the developing countries has provided a space of 1.8 billion dollars to Pakistan.
He said the international financial institutions are appreciative of our reforms programs. This is the reason that 1.4 billion dollars Covid-19 related financing has been provided by the International Monetary Fund. The Asian Development Bank provided five million dollars yesterday for fifteen years on a very low interest rate.
