Pakistan’s economic growth in the outgoing financial year will remain 3.3pc against the target of 6.3pc set by the previous government. According to the Economic Survey of Pakistan, the government has failed to meet targets in almost all sectors. It means there will be no immediate relief for the common people, poverty could increase and the number of jobless people would continue to rise in the country. The government will have to act fast to improve the situation.
To offset adverse effects of the economic slowdown on the poor, the government has announced the launch of a new ration card scheme to provide nutritious food to one million deserving persons under the Ehsaas Programme. However, by announcing the scheme, the government has admitted that the poor will be hard-pressed in coming days.
The Economic Survey of 2018-19 indicates that Pakistan’s key agriculture sector grew by only 0.8pc against a 3.8pc target, because of unfavourable weather conditions. Pakistan has also missed the target of 25.8 million tonnes of wheat this year, because of untimely rains and storms. Similarly, the drought-like situation in some areas of Sindh and Balochistan, too, had an impact on the overall agriculture sector. Cotton output dropped by 12.7pc against 9.86 million bales in 2018-19 due to shortage of irrigation water, use of low-quality inputs such as inferior seed and fertilisers at the early stage of the crop and reduction of 12pc in the cultivation area.
The rice crop, too, decreased by 3.3pc, sugarcane by 19.4pc against the last year’s production, while low water availability led to 3.1pc and 17.9pc reduction in the sown area for rice and sugarcane, respectively.
Livestock is the only sector whose growth went slightly above the official target while all other sectors performed below expectation. A sharp decline was witnessed in the industrial sector that registered a growth of 1.4pc against the target of 7.6pc despite the fact that power generation has increased. The manufacturing sector slid by 0.3pc and the large scale manufacturing (LSM) showed a negative growth of 2pc against the target 8.1pc. The service sector grew by 4.7pc against the target of 6.5pc, while the construction sector achieved the growth of 7.6pc against a 10pc target. Delays in making key policy decisions by the government, including the one about going to the International Monetary Fund (IMF) for a bailout package and those related to the construction and industrial sectors, created confusions among investors, experts believe. The only achievement made by the government during the period was in the livestock sector that grew by 4pc against the target of 3.8pc.
To offset the fallout of the low economic growth, the government has planned many initiatives. Under the ration card scheme, special nutritious fortified food will be provided to children of less than two years of age and vulnerable pregnant and lactating women to avoid stunting. Under the Ehsaas Programme, 80,000 poor people would be given interest-free loans, besides sewing machines, cattle and retail shop provisions to start their own businesses. Six million women, identified through the ongoing Socio Economic Registry Survey, would get stipends in their saving accounts and their access to cell phones would be increased. Five hundred Kifalat Centres will provide online access to free courses to poor women and their children. They will have access to free school lessons, IT courses, adult education and certificate courses in stitching, kitchen gardening, electrician and plumbing. Over Rs100b will be provided through the Kamyab Youth programme under which young people would be provided loans at subsidised rates. Another Rs250 billion will be provided for agriculture development.
Prime Minister Imran Khan had promised 10 million jobs and five million houses to the underprivileged. He had announced the provision of cheap electricity, gas, fuel and essentials to the people after coming to power. Instead, their rates have doubled in the first 10 months of the government. The government’s major concern is the political and economic cost of the painful IMF programme after rising inflation amid higher energy prices have already crushed the poor.
Pakistan faces chronic economic woes, including dwindling foreign exchange reserves, low exports, high inflation, growing fiscal deficit, and current account deficit. However, Pakistan is on the path of consolidation to tackle sizeable fiscal and current account deficits but the imbalances are expected to diminish slowly, said the World Bank in a recent report. It estimates the country’s GDP growth rate to reach 2.7 per cent in 2019-20. However, the consolidation measures, coupled with other macroeconomic improvements, are likely to lead to an increase in the economic growth to 4pc in the beginning in fiscal year 2020-21, said the report titled “Global Economic Prospects: Heightened Tensions, Subdued Investment”.
The government is barely managing debt servicing and necessary expenditure and funds for public welfare look impossible at the moment. The government aims to introduce more reforms in the next few months. It means there is no prospect of relief for the people anytime soon.
Commenting on the first year performance of the government, Pakistan Muslim League-Nawaz (PML-N) Information Secretary Marriyum Aurangzeb said Prime Minister Imran Khan should read her party’s first year economic survey and learn the difference “between the performance of an elected government and a selected regime.” She claimed the PML-N had achieved most of the targets set for its first year in government while the Pakistan Tehreek-i-Insaf (PTI) government had started registering a retraction on all economic indicators instead of progress. “The Economic Survey is an attested certificate of Imran Khan’s incompetence, failure and inability,” she claimed.
However, PML-N critics say it has always fudged figures on the economy to present a rose picture to international financial institutions and the Pakistani people. They say the ambitious targets were set by the outgoing PML-N government just before the general elections, while the PTI government took office 10 months ago. The World Bank report is also a silver lining for the people of Pakistan and they can hope for betterment after few years.