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Dismal growth

THE economy grew at an average rate of 3.29 per cent (provisional) in fiscal year 2018-19 against an ambitious target of 6.2pc set in last year’s budget, the Pakistan Economic Survey revealed on Monday. The documents, unveiled by Advisor on Finance, Dr Abdul Hafeez Sheikh, showed that the Government missed most of the targets set for the outgoing year as prospects for the next year are also not so good.
What the survey contains is not unexpected in view of the ground realities and what we have been witnessing during the current financial year. The growth rate was bound to slow because of decision of the government to lower the developmental expenditure, stop funding of even the ongoing projects and frequent increases in prices of electricity, gas and POL products that raised the cost of doing business. The Advisor stated that the country’s fiscal position had weakened to such an extent that it needed loans to pay back interest on the already obtained and piled-up loans. However, it may be pointed out that the same argument was advanced by the previous government of PML(N), which went to IMF on the plea to be able to pay back loans obtained by its predecessor PPP. It is quite obvious that neither the strategy nor the vision has changed as the present Government too obtained more loans (15.2 billion dollar) in a few months than the previous government got in its entire tenure. The consequences of such heavy dependence on foreign loans will have to be borne by the coming governments, which might find themselves in an awkward position due to squeezing fiscal space. The situation could change if we were able to attract investment, boost industrialization and as a result production, produce surplus for export and diverse our export base. Pakistan is an agrarian country and focus on agriculture could also help the country overcome its economic and financial woes. Negative growth of major crops including cotton, rice and sugarcane tells the tale and exposes flaws in our policies and programmes. There seem to be no worthwhile strategy in place to realize these cherished objectives and the Government will have to change its policies and philosophy to put the country on the right track. The only good thing that the survey highlighted was an increase in remittances by Overseas Pakistanis and the prospects of Government achieving the target of $21.1 billion by the close of the financial year. This shows the measures taken by the PTI Government to motivate Overseas Pakistanis to send more and more money through formal channels are paying dividends. With a professional like Dr Abdul Hafeez Sheikh at the helm of economic decision making, it is hoped that the situation would change in coming months and the serious challenges would be addressed in a satisfactory manner. The most worrying development from the point of view of the common man is steep rise in inflation, which necessitates urgent measures to stem the trend.