The provisional Gross Domestic Product (GDP) growth rate of Pakistan for FY 2020 is estimated at negative 0.38 per cent on the basis of 2.67, -2.64 and -0.59 per cent growth in agricultural, industrial and services sectors respectively, states the Economic Survey of Pakistan 2019-20 released on Thursday, a day ahead of the presentation of Annual Budget 2020-21 in the National Assembly on Friday.
Presented by Adviser to the Prime Minister on Finance Hafeez Sheikh the Economic Survey document has presented a dismal picture of Pakistan’s economy as most of the economic indicators have gone nose dive.
For example, the negative performance of both Industry and Services has overshadowed the growth in the agriculture sector, which grew by 2.67 per cent. This sector is badly hit by the locust swarms in Sindh and Punjab, the major agriculture provinces.
The economic team of the government has put all the burden of the downward slide of Pakistan’s economic indicators on the overall slowdown due to the lockdown after Coronavirus (COVID-19) in March 2020, although the economy was not performing well even before the start of COVID-19.
The provisional growth in the industrial sector has been estimated at -2.64 per cent mainly due to a negative growth of 8.82 per cent in the mining and quarrying sector and a decline of 7.78 per cent in the large-scale manufacturing sector. Due to the lockdown situation in the country, the growth estimates of the Small-Scale Industry for FY2020 are 1.52 per cent.
Similar to the industrial sector, the services sector of the economy has also witnessed a significant impact of the lockdown situation in the country due to COVID-19, particularly in the Wholesale and Retail Trade and Transport Sectors. The services sector has declined provisionally at 0.59 per cent mainly due to a 3.42 per cent decline in the Wholesale and Retail Trade sector and a 7.13 per cent decline in Transport, Storage and Communication sectors.
The finance and insurance sector, however, witnessed a slight increase of 0.79 per cent. The Housing Services, General Government Services and Other private services have contributed positively at 4.02, 3.92 and 5.39 per cent respectively.
The fiscal deficit has substantially reduced to 4.0 per cent of GDP during July-March, FY2020 against 5.1 per cent of GDP in the comparable period last year. Similarly, a remarkable turnaround is visible in the primary balance, which posted a surplus of Rs 194 billion during July-March, FY2020 against a deficit of Rs 463 billion. Overall, the improvement in the fiscal account is largely attributed to a higher provincial surplus and a sharp rise in non-tax revenues.
The government has retired Rs 736.47 billion to SBP against the borrowing of Rs 3,204.72 billion in last year. On contrary, the Government borrowed Rs 1,760.38 billion from scheduled banks against the retirement of Rs 2,213.85 billion last year.
Exports during July-April, 2019-20 remained at $ 19.7 billion compared to $ 20.1 billion during July-March, 2018-19, posting a decline of 2.4 per cent.
The total imports during July-April FY2020 declined to $ 36.1 billion as compared to $ 40.3 billion same period last year, thus registering a decline of 16.9 per cent.
During Jul-April FY2020, remittances increased to $ 18.8 billion as compared to $ 17.8 billion during the same period last year, with a growth of 5.5 per cent.
During July-March FY2020, the current account deficit (CAD) reduced by 73.1 per cent to US$ 2.8 billion (1.1 per cent of GDP) against US$ 10.3 billion last year (3.7 per cent of GDP). The significant reduction in CAD reflected mainly the impact of macroeconomic stabilization measures taken by the government.
The executive summary of the Economic Survey 2019-20 can be accessed online from the website of the Ministry of Finance. Please Click Here
