Staff Reporter Karachi
The IBA Karachi held a discourse on State of the Economy and the Federal Budget 2021-22 by Dr. S Akbar Zaidi, Executive Director, IBA and Dr. Ishrat Husain, Advisor to the Prime Minister on Institutional Reforms and Austerity and Professor Emeritus IBA, at the IBA City Campus.
Attendees included the faculty members, students, alumni, academics, economists, and the diplomatic corps.
Commencing the session, Dr. Zaidi, elaborated on the findings presented in a report, titled State of the Economy and the Federal Budget 2021-22.
The report is compiled by the Faculty of the Economics Department at the School of Economics and Social Sciences (SESS), IBA and will be launched soon.
Shedding light on Pakistan’s economic situation during the pandemic, Dr. Zaidi said that there has been growth in the economy, but it is improbable that it will be 3.94%.
He also said that the ‘Investment-to-GDP’ ratio declined from 15.3% of GDP in 2019-20 to 15.2%. The Foreign Direct Investment (FDI) has decreased, and the Tax/GDP also went down from 12.6% to 9.6%. Moreover, remittances have increased significantly to $29 billion.
Briefing on the unemployment and inflation situation, he said that 21 million Pakistanis were laid off due to Covid-19 in 2020 and 2021, causing the unemployment rate to reach 25%. Food inflation has increased to around 13%-15% for most of the year.
Exports’ revenues are also stagnant at $25 billion. Growth target is 4.8% for the next year, while the inflation rate is expected to be 8%.
Millions of households have been pushed into poverty as wages have fallen and the current economic and financial environment is precarious. Furthermore, working women have been affected 17% more than men.
Highlighting the aspects of the budget 2021-22, Dr. Zaidi said that the mandate for increased exports, an increase in salaries for government servants and an increase in the minimum wage by PKR 2,500 were fruitful steps towards stabilizing the country’s economy.