For the first time in 68 years, Pakistan’s economy is set to contract in the outgoing fiscal year with a negative 0.38 per cent due to the adverse impact of the coronavirus pandemic coupled with the already weak financial situation before the pandemic hit the country, according to the economic survey unveiled on Thursday.
Advisor on Finance Abdul Hafeez Sheikh, releasing the Pakistan Economic Survey 2019-20 said the economy suffered massively due to the coronavirus pandemic. The country has 1,20,000 cases of the virus so far which forced the government to impose lockdown in March.
The pandemic has badly hit the economy in the current fiscal year ending on June 30. For the first time in 68 years, Pakistan’s economy has marginally contracted by 0.38 per cent in the outgoing fiscal year due to adverse impacts of novel coronavirus coupled with economic stabilisation policies that had hit the industrial sector much before the deadly pandemic.
The economic survey said, except for the agriculture sector that grew 2.7 per cent, the industrial and services sectors witnessed negative growth rates, pulling the overall growth rate down to negative 0.38 per cent in the fiscal year 2019-20, ending on June 30.
Sheikh said the International Monetary Fund (IMF) had warned about the dire impact of COVID-19 on the developing countries due to drop in exports and remittance. He said, “Exports fell due to a fall in global demand while remittance decreased due to layoffs of Pakistanis employed abroad.”
He said the current account deficit was reduced by 73.1 per cent to USD 2.8 billion (1.1 per cent of GDP) against USD 10.3 billion last year which was 3.7 per cent of GDP. Sheikh said, “The current account deficit that we inherited was around USD 20 billion but we have reduced that to around USD 3 billion. This is a huge achievement of the government.”
He said the government-controlled state expenses and did not borrow from the State Bank of Pakistan during the outgoing fiscal year. Sheikh said, “This was the first time, I think, in the country’s history, and our primary balance, meaning our expenses were less than our earnings, went into surplus.”
