ISLAMABAD: Pakistan economy is on solid growth path and has potential togrow at much higher rate in next five years despite a challengingenvironment across the globe, Khaleej Times reported while quoting experts.
Top government officials, analysts and corporate leaders repose trust ingrowing economy and said higher GDP growth in 5-6 per cent per annum wasgoing to be a ‘new normal’ in next five years amid considering strongeconomic indicators of the country, it said.
“Yes, we have a potential to grow at much higher rate in coming years. TheState Bank of Pakistan projects three per cent GDP growth in financial year2020-21 and four per cent in 2021-22,” Dr Reza Baqir, Governor, State Bankof Pakistan (SBP), told the paper during an event in Dubai last week.
The paper quoted newly-appointed Finance Minister, Shaukat Tarin havingsaid that Pakistan would go for an ambitious six per cent economic growthtarget in the next two years as the International Monetary Fund (IMF) showsits willingness to renegotiate tough conditions for a $6 billion loan inthe wake of rising Covid-19 cases. “The federal government will earmark asmuch as Rs900 billion ($6 billion) for development expenditure in the yearbeginning July. That’s the bare minimum we need for a country this size,”Tarin said.
According to the report, the IMF had projected four per cent GDP growth forPakistan during fiscal year 2021-22, starting in July. Islamabad isexpected to post 1.5 per cent expansion during the current fiscal yearending on June 30 after a rare contraction (-0.4 per cent) last year.
“We have strong economic indicators this year despite the Covid-19 pandemicchallenges and this is a good omen for the economy. The government ensuresmore than Rs2 trillion stimulus to steer the economy out of Covid crisis bysupporting the businesses through much-needed liquidity and fundsdistribution at grass root level,” Dr Baqir said. Elaborating, the centralbank governor said SBP offered Rs450 billion liquidity under TemporaryEconomic Refinance Facility to private sector to absorb Covid shock whileanother Rs240 billion provided as working capital to avoid lay-off and joblosses.
“The central bank also offered Rs900 billion cushion to banks to ensurerelief to distress businesses in deferment and restructuring of principalpayment and mark-up charges. These are some of the measures which helpedthe economy to bounce back quickly to meet global demand after the lockdownperiod,” Dr Baqir said. According to the report, while referring to risingforeign exchange reserves, orderly rupee-dollar parity, improving currentaccount balance and other economic indicators such as large-scalemanufacturing, cement, automobiles and fast-moving consumer goods, the SBPgovernor said economy was moving in right direction and will perform betterin coming years.
“Pakistan is one of the few countries that reduced fiscal deficit despitethe Covid challenge and global economic slowdown by reprioritisingspending. The country’s public debt to GDP ratio has remained broadlystable last year while it has risen for most emerging markets due to Covid;this has improved the country’s creditworthiness,” he said.