A farmer at his field in the outskirts of Lahore, Pakistan. Agence France-Presse

The Ministry of Finance of Pakistan said that the government’s extensive measures have helped the economy move progressively along the adjustment path and stabilisation process and economic recovery is expected towards the end of FY2020.

“The government is focused on bringing improvement in the key sector growth through inclusive growth in agriculture, industrial and services sectors,” said a statement by the Finance Division in response to certain news reports carried in a section of the regarding downward revision of growth by the World Bank.

The government is cognizant of challenges and stringently focused on resolving them particularly, reducing inflation, creating job opportunities and achieving high growth rate. Keeping in view the positive developments on major economic indicators, we expect that the economy will likely to achieve better growth prospects as against the projections of the World Bank.

The World Bank in its report ‘2020 Global Economic Prospects’ had forecasted Pakistan’s current year growth rate at 2.4% before touching 3 % next fiscal year and 3.9 % in FY2022. The bank’s report had also mentioned that the growth had decelerated an estimated 3.3 % in FY2018-19, reflecting a broad-based weakening in domestic demand.  In addition, the report had described that significant depreciation of the Pakistani rupee resulted in inflationary pressures, monetary policy tightening restricted access to credit, curtailing public investment to deal with large twin deficits and budget deficit rose more sharply than expected. For growth in farming sector, the target production of wheat is 27 million tonnes given by FCA in last meeting held in October.

In addition to uplift agriculture sector “National Agriculture Emergency Programme” in coordination with all provinces has been introduced and approved 13 mega projects at the cost of Rs287 billion. 

Agriculture credit disbursement target for CFY20 has been set at Rs1,350 billion. Agriculture credit disbursement increased by 20% to Rs 482 bn during Jul-November, FY2020 against Rs.402 billionlast year. It may be pointed out that during FY2019, the slowdown in economy was largely attributed to various policy measures to manage the twin deficit crisis. Consequently, these measures helped to contain demand pressures and contributed to import compression. However, the outcomes of these measures were realized on the industrial sector. Particularly LSM sector witnessed a negative growth. At the same time, high input costs along with water shortages weakened agriculture sector’s output and hence, the drag in the commodity-producing segments spilled over to the services sector as well. Resultantly, the real GDP growth recorded at 3.3 per cent.

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