Pakistan Economy: FINANCIAL discipline and politically tough and painful decisions taken by PTI government over the last two and a half years have apparently started showing some positive results in the form of improved economic indicators. Despite debt servicing of $10b annually, foreign exchange reserves have reached $20b mainly due to increase in exports and remittances. The current account has shown a surplus of $1.6b during first five months of current financial year against a deficit of $1.7b in the corresponding period last year.
Reduction in interest rate as well as the package announced for construction industry is leading to increased economic activity, which indeed will augur well to give impetus to growth rate and creation of job opportunities. Industries, especially textile is operating exceptionally at full capacity. While international financial institutions are also acknowledging improvement in the country’s economy, the State Bank of Pakistan (SBP) in a statement the other day also stated that economy recovery underway since July last year has further strengthened in recent months.
Large Scale Manufacturing grew 7.4 percent in October and 14.5 percent in November. The manufacturing recovery is also becoming broader with 12 out of 15 subsectors registering positive growth thus enhancing more employment recovery. This clearly indicates that matters are heading for positive trajectory regardless of Covid-19 pandemic.
Some major strides have also been made in the social sector. The way the scope of Sehat Sahulat Cards is being expanded on a fast track basis especially by Punjab and Khyber Pakhtunkhwa governments will indeed bring a major change in the lives of poor and deserving families. Ehsaas is the biggest and boldest programme ever launched in the country’s history to uplift marginalised people. Especially the cash assistance provided to millions of deserving families in most transparent manner in the wake of Covid-19 outbreak helped to protect and mitigate the sufferings of vulnerable segments of society.
Despite all this the challenges are not over and PTI government must move forward more prudently to sustain the progress achieved on economic front. The surge in prices of oil and LNG in the international market will definitely adversely impact our current account. Therefore, focus must remain on bolstering exports through diversification and the remittances by giving more confidence to expatriate Pakistanis. The dip in Foreign Direct Investment (FDI) must be a matter of concern and corrective measures needs to be taken to attract investment especially from overseas Pakistanis and friendly countries such as Saudi Arabia, the UAE and Qatar.
Special focus for the uplift of agriculture sector is need of the hour if we really want to put the country on sustainable growth path. The farmers need to be given more incentives, as it will encourage them to grow more crops and take the country towards self-reliance. Most importantly, the price hike is really taking a heavy toll on the people and also affecting popularity of the ruling party. Everybody supports the narrative of PM Imran Khan against corruption yet his foremost priority should be now bringing to book profiteers and hoarders. A strong mechanism should be put in place to ensure availability of essential items to masses at reasonable rates.