ISLAMABAD: With the projection of up to 1.5% negative gross domestic product (GDP) growth owing to the impact of Covid-19 pandemic in FY20, the country’s economy is expected to turn around to record 2% growth in the new fiscal year (2020-21), Adviser to Prime Minister on Finance Abdul Hafeez Shaikh said on Thursday.
Participating in a webinar on “Pakistan’s Economy: Post-Covid-19”, organised by the Institute of Chartered Accountants of Pakistan (ICAP), the adviser said Pakistan expected around 3% growth during the current fiscal year but due to the coronavirus it was more likely to register negative 1-1.5% growth.
However, he said the GDP was expected to grow next year when the situation would improve. Likewise, the adviser said the fiscal deficit, which was projected at 9% this year compared to the target of 7%, would be brought down next year while the debt-to-GDP ratio would also be slashed.
Talking about the post-Covid-19 situation, the adviser said the International Monetary Fund (IMF) had predicted 3% global growth. “The contraction in global economy has been affecting Pakistan’s exports as witnessed in April when exports dropped 40% compared to April last year.”
Likewise, unemployment was going up due to the lockdown and low economic activity while revenue collection declined, which would affect expenditures. Shaikh pointed out that the government had taken comprehensive measures and announced a Rs1.2-trillion economic stimulus package to help businesses and vulnerable segments of society to deal with challenges of the coronavirus.
He said the IMF had been supportive of the government’s stimulus package, which was introduced to check contraction of the economy, while the package given to the construction industry would help continue economic activities.
He said when the government came to power, the country was facing a severe economic crisis, however, efforts were made to come out of the crisis and tough decisions were made, which ultimately produced results.
Published in The Express Tribune, May 15th, 2020.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.