Pakistan succeeded in reviving economy despite Covid pandemic: Forbes
US magazine lauds govt’s efforts saying even US and India faced difficulties in dealing with the pandemic
Leading American business magazine Forbes has lauded the government's efforts to tackle pandemic and to stabilise and grow Pakistan's economy, saying that the government has been successful in reviving its economy through prudent policies which is expected to grow at 4%.
Successful management to tackle the pandemic and the success of IMF programme, as evidenced by the 4% GDP growth, is a testament to Pakistan's growth potential and good investment opportunities, the magazine said.
It said when countries like United States and India have had difficulties in dealing with the coronavirus pandemic. Pakistan has succeeded in reviving its economy, which is expected to grow at a rate of about 4%, exceeding initial estimates in 2021.
The State Bank of Pakistan (SBP) initially forecast a 3% increase in the GDP, while the International Monetary Fund (IMF) and the World Bank forecast an increase of 1.5% and 1.3%, respectively.
Also read: 4% GDP growth beats gloomy forecasts
According to the report, the services sector, which is projected to grow at a rate of 4.43% in 2020-2021, contributes significantly to the overall growth. This is certainly noteworthy for a country like Pakistan which is succeeding in expanding its services sector. The growth rate of the agricultural sector is estimated at 2.77% while that of the industrial sector is 3.57%.
The situation in India is dire, with an incredible number of 28,441,986 cases of corona and 338,013 deaths.
Due to the increase in awareness on social media in Pakistan, citizens started wearing masks to protect against the novel coronavirus.
Last year, the country witnessed a spike in cases during the Eid festival, but this time the government partially imposed a lockdown, taking steps such as shutting down unnecessary businesses and banning domestic tourism, which helped to contain the spread of infection.
However, the sanctions caused difficulties for the working class. The government hopes that by the end of 2021, last week, on May 26 and 27, the Pakistan Stock Exchange (PSX) had witnessed the highest ever buying and selling of 1.56 billion shares and 2.21 billion shares, respectively.
Pakistani investors and traders are optimistic and enthusiastic about the public budget and proposals for further growth.
According to SBP Governor Reza Baqir, flexible monetary and monetary policy has led to unprecedented growth in Pakistan's gross domestic product (GDP). The SBP hastily reduced the policy rate by 625 basis points to 7%. An aid package equal to 5% of GDP was provided.
The SBP governor said the government also controlled the coronavirus situation as the rate of new coronavirus cases is 12 out of 1 million people in Pakistan while the rate is 62 cases per 1 million people in the rest of the world.
In the IMF's global economic outlook, the ratio of government debt to GDP in 2020 did not change significantly compared to the previous year. Bloomberg also reported the same, while the rate of debt of emerging economies has also increased in terms of GDP by 10%
Raza Baqir said that due to the prudent fiscal and monetary policies of the government, the debt rate in terms of GDP has not increased.
According to the report, inflation is expected to remain between 7% and 9% in Pakistan.
Also read: Pakistan’s growth miracle
According to SBP Governor Raza Baqir, the recent rise in inflation was mainly due to energy and food items and one-time supply is a major factor, but authorities concerned are ready to respond to the pressure of possible demand in a timely manner.
The report said that the IMF provided Pakistan with an expanded fund of $6 billion. According to Baqir, Pakistan is moving towards stability and growth. The government has managed to turn a $19 billion current account deficit into a $900 million surplus. Foreign exchange reserves increased from $2.7 billion to $16 billion. The report said that the successful management of the pandemic and the success of the IMF programme, as evidenced by the 4% GDP growth, have helped Pakistan to grow and offer good investment opportunities.