Prime Minister Imran Khan had asserted that after facing various challenges, Pakistan’s economy is now stable and moving in the right direction and the country’s economy is growing with the passage of time.
On the other hand, after the federal budget, economic activities in the country came to halt. Flour Mills Association has announced to go on strike leading to concerns over a rise in the price of commodity. The Oil Tankers Association has also announced a strike and suspended the supply for an indefinite period.
Pakistan’s economy has been growing slowly over the past two decades. The annual per capita growth has averaged only two percent, less than half of the South Asia average, partly due to inconsistent macroeconomic policies.
In the past three years, Pakistan’s annual GDP growth rate has fallen even further, to an average of 1.9 percent, due to the combined effects of the 2018 balance of payments crisis and the COVID-19 pandemic.
Meanwhile, the World Bank (WB) has estimated that poverty in Pakistan has increased from 4.4 percent to 5.4 percent in 2020, as over two million people have fallen below the poverty line. As per the Bank’s estimates, 40 per cent of households suffered from moderate to severe food insecurity in Pakistan.
The sectors in Pakistan that employ the poorest, such as agriculture, are expected to remain weak, and therefore poverty are likely to remain high, said the WB. The current account deficit is also projected to narrow to 0.8 per cent of GDP in FY21, as a wider trade deficit is offset by stronger remittances inflows.
Pakistan is already suffering from economic hardships and the problems can be exacerbated by the suspensions of gas supply to industries. This year, the industries have suffered billions of rupees due to COVID-19 pandemic.
Hence, there is a dire need to put the economy on a high growth path that is sustainable over the long run. The government should formulate policies with all sectors to further increase the rate of economic growth and meet the targets.
