Sunday , July 5 2020
Breaking News
Home / Breaking News / Pakistan’s economy contracted 0.38pc in FY2020 as coronavirus wreaked havoc: Economic Survey
Pakistan’s economy contracted 0.38pc in FY2020 as coronavirus wreaked havoc: Economic Survey

Pakistan’s economy contracted 0.38pc in FY2020 as coronavirus wreaked havoc: Economic Survey

ISLAMABAD: Advisor to the Prime Minister on Finance Abdul Hafeez Shaikh presented the Pakistan Economic Survey 2019-20 on Thursday, highlighting the blows dealt to the economy due to the COVID-19 pandemic.

Hafeez touched upon the fragile situation of the economy, saying that Pakistan’s loans increased to Rs25,000bn and if the total debts and liabilities were added up, they would amount to Rs30,000bn.

He said that when the new government had taken over the reins of the country, Pakistan’s were expenses were higher than its income hence the country was almost about to default on its loans. “The country was witnessing growth on loans that were secured from abroad,” he said.

Talking about measures taken by the government to curtail expenditures, he praised Prime Minister Imran Khan and army chief Gen Qamar Javed Bajwa. He said that the government had cut down its expenditures and at the same time, increased public spending.

Shaikh said that the government had not taken any loans from the State Bank of Pakistan the entire year and did not give any supplementary grant to any department as it wanted to ensure the public’s money was spent carefully.

The prime minister’s advisor said that the government had returned loans worth Rs5,000bn. He said that Pakistan’s revenue was less due to a decline in its exports, saying that the government doubled the money for the coronavirus fund despite the economy suffering from setbacks due to the pandemic.

Talking about the growth, he said that the industry growth was recorded at -2.64% whereas the services sector, especially wholesale, was recorded at -3.6%. He said that figures showed that the Transport and communication growth registered a -7.1% while the fiscal deficit from July to March was recorded at 4% of the GDP.

Speaking about the coronavirus pandemic, Shaikh said that it was not possible to ascertain when the pandemic would end. He said that the government had tried to maintain a balance between saving people’s lives and at the other end, protecting the economy as well.

“Pakistan’s economy suffered losses worth 3000 bn. The government announced a package worth Rs 1240 billion to respond to the crisis situation# launch of Economic Survey 2020,” he said.

Shaikh spoke about the government’s measures related to the current account deficit, saying that steps had been taken to reduce the deficit by 30% to $13.4 bn in FY 19.

He disclosed that the pre-COVID-19 current account deficit (July-March, FY 2020) reduced by 73% to $2.8 bn (1.1 % of GDP) against $10.3 bn (3.7% of GDP) from last year.

Blaming the “changed situation” due to the coronavirus pandemic, Shaikh said that FBR’s tax collection had declined after showing a 17% growth rate. “We were confident to reach the 4.8 trillion collection target but the situation has changed due to coronavirus but still, we expect that when things change and people are better off, they will pay their taxes,” he said.