Pakistan's economy to contract by 0.38%: Economic Survey

13 Jun '20

2 min read

Pic: Shutterstock

For the first time in 68 years, Pakistan's economy is set to contract this fiscal by 0.38 per cent due to the impact of the COVID-19 pandemic along with the pre-pandemic weak financial situation, according to the Economic Survey released recently by finance advisor Abdul Hafeez Sheikh, who said exports fell due to a fall in demand while remittance decreased due to layoffs of Pakistanis employed abroad.

Sheikh said the current account deficit was reduced by 73.1 per cent to $2.8 billion (1.1 per cent of the gross domestic product (GDP]) against $10.3 billion last year which was 3.7 per cent of GDP. The current account deficit that the present government inherited was around $20 billion.

Except for the agriculture sector that grew by 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 fiscal 2019-20, which ends on June 30, the Economic Survey said.

The per capita income in dollar terms has also dipped to 1,366—a contraction of 6.1 per cent, but it increased in rupee terms to Rs 214,539.

The overall tax collection grew by 10.8 per cent to Rs 3,300.6 billion during July-April 2020 against Rs 2,980 billion in the comparable period last year. The tax collection estimate for this period was Rs 4,510 billion.

The government controlled state expenses and did not borrow from the State Bank of Pakistan during this fiscal, Sheikh was quoted as saying by Pakistani media reports.

He said Rs 3,000 billion were set aside for loans in the next fiscal while Rs 5,000 billion were offered as loans in this fiscal. He promised more relief and reduced taxes in the new budget.

Fibre2Fashion News Desk (DS)

More Textiles News - Pakistan...