Cash-strapped Pakistan's economy showed a dismal performance during the outgoing financial year with just 0.29 per cent GDP growth and spiralling inflation at over 29 per cent, according to the economic data unveiled by Finance Minister Ishaq Dar on Thursday.
Dar launched the Economic Survey 2022-23 at a crowded press conference, an annual ritual performed one day ahead of next year's budget. The survey showcases the economic achievements of the government during the year ending on June 30 amidst political turmoil and unprecedented floods.
The documents showed that the “GDP growth in the outgoing year remained at 0.29 per cent, missing the target of 5 per cent”, including 1.55 per cent in agriculture, 2.94 in industry and 0.86 per cent in the services sectors respectively.
“All three sectors missed the targets, with the industrial sector contracting to 2.94 per cent from the target of 7.1 per cent growth,” the data showed.
The survey showed that Pakistan registered 29.2 per cent inflation from July 2022 to May 2023, against 11 per cent in the same period last year and far ahead of the target of 11.5 per cent for FY2023.
On the positive side, the tax collection saw a major increase with the Federal Board of Revenue (FBR) registering 16.1 per cent to Rs 5637.9 billion from July to April against Rs 4,855.8 billion in the previous year. The target for the entire year is Rs 7,470 billion.
Similarly, the government showed better performance to contain the current account deficit from USD 3.4 billion to USD 13.7 billion in the July to March period, showing a current account deficit reduction of 1 per cent of the GDP to 4.6 from 4.7 per cent.
The survey shows that the fiscal deficit was contained to 3.6 per cent of the GDP during the first nine months of the current fiscal year against 3.9 per cent of the GDP in the same period of last year.
The finance minister defending the economic performance accused the previous government of Imran Khan of economic problems, which were compounded by the natural disaster of floods and the international conditions.
“Floods and global pressure were the major factors that hampered the achievement of targets. I think the current achievements are realistic given the circumstances,” Dar said, adding that floods caused USD 30 billion in economic losses.
The minister also said that the government had set 3.5 per cent GDP growth for the next year. He said several incentives would be announced in the budget tomorrow, including the government setting a USD 15 billion export of IT target in the next five years to increase it from the current USD 2.5 billion.
Minister for Planning Ahsan Iqbal in his remarks defended the performance of the government by saying that 2022-23 was a “force majeure” year for the country but the situation was changing due to the difficult decisions by the government.
Earlier, the economic team led by Finance Minister Dar called on Prime Minister Shehbaz Sharif and presented the Economic Survey for the year 2022-23, who "commended" the one-year performance of the team.
He said regardless of the economic challenges left behind by the previous government and unprecedented floods, the services of the economic team for the country's economy are appreciable.
Prime Minister Sharif said that the government will invest a substantial amount in the next budget for the uplift of the agriculture and IT sectors. He said the small farmers will be provided with high-quality seeds and equipped with state-of-the-art agriculture equipment.
He said that the interest-free loan programme for small farmers will also be expanded in the next budget. He announced that the government will award prizes to the farmers achieving higher per acre yield.
The economic situation has never been so grim in a country which since independence has thrice seen military coups and the ouster of elected governments.
Cash-strapped Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet. Their woes increased manyfold after last year’s catastrophic floods that killed more than 1,700 people and caused massive economic losses.