Pakistan economy is on a solid growth path and has the potential to grow at much higher rate in the next five years despite a challenging environment across the globe, Dubai-based Khaleej Times reported while quoting experts.
Top government officials, analysts and corporate leaders repose trust in the growing economy and said GDP growth rate of 5-6% per annum is going to be a “new normal” in the next five years amid strong economic indicators of the country, the newspaper said.
"Yes, we have a potential to grow at much higher rate in coming years. The State Bank of Pakistan projects 3% GDP growth in financial year 2020-21 and 4% in 2021-22," State Bank of Pakistan (SBP) Governor Dr Reza Baqir told the daily during an event in Dubai last week.
The newspaper quoted newly appointed Finance Minister Shaukat Tarin as saying that Pakistan would go for an ambitious 6% economic growth target in the next two years as the International Monetary Fund (IMF) showed its willingness to renegotiate tough conditions for a $6 billion loan in the wake of rising coronavirus cases.
"The federal government will earmark as much as Rs900 billion ($6 billion) for development expenditure in the year beginning July. That's the bare minimum we need for a country this size," Tarin said.
According to the report, the IMF had projected 4% GDP growth for Pakistan during fiscal year 2021-22, startingin July. Islamabad is expected to post 1.5% expansion during the current fiscal year ending on June 30 after a rare contraction (-0.4%) last year.
"We have strong economic indicators this year despite the Covid-19 pandemic challenges and this is a good omen for the economy. The government ensures more than Rs2 trillion stimulus to steer the economy out of Covid crisis by supporting the businesses through much-needed liquidity and funds distribution at grass root level," Dr Baqir said.
Elaborating, the central bank governor said SBP offered Rs450 billion liquidityunder Temporary Economic Refinance Facility to private sector to absorb Covid shock while another Rs240 billion provided as working capital to avoid lay-offs and job losses.
"The central bank also offered Rs900 billion cushion to banks to ensure relief to distress businesses in deferment and restructuring of principal payment and mark-up charges. These are some of the measures which helped the economy to bounce back quickly to meet global demand after the lockdown period," Dr Baqir said.