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Pakistan Prime Minister Imran Khan Demonstrated Effectiveness as Crisis Leader
Prime Minister Imran Khan has effectively led Pakistan through multiple crises in the last 4 years. Khan inherited dangerously low forex reserves in 2018 which are now at $23 billion, near the highest level in the nation's history. The COVID pandemic that hampered Pakistan's recovery has been handled well with the fully vaccinated rate for the eligible population at more than 75%. Not only has Khan deftly navigated his nation through these crises but his government has also revived the country's economy and grown exports by 26%. Domestic savings rate recovered to nearly 17% after plunging to a low of 12% in 2018. The year 2021 was a banner year for Pakistan's technology startups that raised over $350 million in funding, more than the amount raised in the previous 5 years. Manufacturing and construction industries are enjoying a boom last seen during the Musharraf years in 2000-2007.
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| Historic Inflation Rates in India & Pakistan. Source: World Bank |
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| Pakistan Exports in First 8 Months (July 21-Feb 22) in FY 22. Sourc... |
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| Pakistan Employment By Sectors. Source: Pakistan Bureau of Statistics |
For the first time in recorded history, the labor force participation rate in Pakistan is now higher than in India, according to the ILO/World Bank estimates.
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| Labor Participation Rates in India and Pakistan. Source: World Bank... |
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| Unemployment Rate in India and Pakistan. Source: ILO/World Bank |
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| Pakistan Savings Rate. Source: Global Economy |
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| QIM Index 2019-22. Source: APP |
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| Pakistan Large Scale Manufacturing Index. Source: Mettis Global |
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| Cement shipments in Pakistan. Source: All Pakistan Cement Manufactu... |
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| Pakistan Startup Investments. Source: Aljazeera |
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Comment by Riaz Haq on May 21, 2022 at 5:22pm
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GDP growth estimated at 5.97pc for FY 2021-22
By Ghulam Abbas
https://profit.pakistantoday.com.pk/2022/05/18/gdp-growth-estimated...
The finance and insurance industry shows an overall increase of 4.93% mainly due to an increase in deposits and loans. Real estate activities grew by 3.7% while public administration and social security (general government) activities posted negative growth of 1.23% due to high deflators. Education has witnessed a growth of 8.65% due to public sector expenditure. Human health and social work activities also increased by 2.25% due to general government expenditures. The provisional growth in other private services is 3.76%.
Overall, the GDP of the country at current market prices has reached Rs.66.949 trillion in 2021-22 which has resulted in an increase in per capita income from Rs.268,223 in 2020-21 to Rs.314,353 in 2021-22 besides the volume of the economy in dollars in 2021-22 stands at $383 billion.
According to details, the meeting also updated the provisional GDP estimates for the year 2020-21 and revised GDP estimates for the year 2019-20 presented in the 104th meeting of the NAC held in January 2022 on the basis of the latest available data.
The final growth rate of GDP for the year 2019-20 has been estimated at -0.94% which was -1.0% in the revised estimates. The revised growth rate of GDP for the year 2020-21 is 5.74% which was provisionally estimated at 5.57%.
The crop sub-sector has improved from 5.92% to 5.96%. The other crops have improved from provisional growth of 8.08% to 8.27% in revised estimates. The growth of the industrial sector in the revised estimates is 7.81% which was 7.79% in the provisional estimates while the growth of the services sector has improved from 5.7% to 6.0%.
Controversy about Chief Economist’s resignation:
Earlier on Wednesday, it emerged that Chief Economist Planning commission Dr Ahmad Zubair resigned from the position owing to exerting pressure from the high ups of planning and finance ministries on GDP numbers.
Sources on the condition of anonymity said that the Minister for planning and the minister of State for finance Ayesha Ghous Pasha have asked the relevant people in the planning commission to sit with the principal economic advisor Finance ministry on growth numbers with contending that GDP growth would be around 4% in the current fiscal year.
When the official of the planning commission stated that they had made a presentation to the previous minister for planning that as per the statistics of production data of various sectors indicates that GDP growth would be around 5.5 to 6 percent upon this minister of state for finance said that there was a shortfall in the projected projection of wheat crop. The official replied that even with this shortfall of 0.1 million metric tons, the production of sugarcane, rice and cotton as well as tomatoes was considerably higher.
Officials further stated that it would not be possible to show less growth on the basis of data available to all the stakeholders therefore such an effort would affect the compromise of PBS data.
Later on, a letter issued by Ahmad Zubair stated that there is news trending on social and electronic media that I resigned from the position of Chief Economist, planning Commission on account of manipulation attempts concerning FY22 GDP growth estimates. I would like to state that PBS has the mandate to estimate National accounts and that the M/PD&SI has no role in matters related to estimating GDP growth.
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Our total consumption of wheat and atta is about 125kg per capita per year. Our per person per day calorie intake has risen from about 2,078 in 1949-50 to 2,400 in 2001-02 and 2,580 in 2020-21
By Riaz Riazuddin former deputy governor of the State Bank of Pakistan.
https://www.dawn.com/news/1659441/consumption-habits-inflation
As households move to upper-income brackets, the share of spending on food consumption falls. This is known as Engel’s law. Empirical proof of this relationship is visible in the falling share of food from about 48pc in 2001-02 for the average household. This is an obvious indication that the real incomes of households have risen steadily since then, and inflation has not eaten up the entire rise in nominal incomes. Inflation seldom outpaces the rise in nominal incomes.
Coming back to eating habits, our main food spending is on milk. Of the total spending on food, about 25pc was spent on milk (fresh, packed and dry) in 2018-19, up from nearly 17pc in 2001-01. This is a good sign as milk is the most nourishing of all food items. This behaviour (largest spending on milk) holds worldwide. The direct consumption of milk by our households was about seven kilograms per month, or 84kg per year. Total milk consumption per capita is much higher because we also eat ice cream, halwa, jalebi, gulab jamun and whatnot bought from the market. The milk used in them is consumed indirectly. Our total per person per year consumption of milk was 168kg in 2018-19. This has risen from about 150kg in 2000-01. It was 107kg in 1949-50 showing considerable improvement since then.
Since milk is the single largest contributor in expenditure, its contribution to inflation should be very high. Thanks to milk price behaviour, it is seldom in the news as opposed to sugar and wheat, whose price trend, besides hurting the poor is also exploited for gaining political mileage. According to PBS, milk prices have risen from Rs82.50 per litre in October 2018 to Rs104.32 in October 2021. This is a three-year rise of 26.4pc, or per annum rise of 8.1pc. Another blessing related to milk is that the year-to-year variation in its prices is much lower than that of other food items. The three-year rise in CPI is about 30pc, or an average of 9.7pc per year till last month. Clearly, milk prices have contributed to containing inflation to a single digit during this period.
Next to milk is wheat and atta which constitute about 11.2pc of the monthly food expenditure — less than half of milk. Wheat and atta are our staple food and their direct consumption by the average household is 7kg per capita (84kg per capita per year). As we also eat naan from the tandoors, bread from bakeries etc, our indirect consumption of wheat and atta is 41kg per capita. Our total consumption of wheat and atta is about 125kg per capita per year. Our per person per day calorie intake has risen from about 2,078 in 1949-50 to 2,400 in 2001-02 and 2,580 in 2020-21. The per capita per day protein intake in grams increased from 63 to 67 to about 75 during these years. Does this indicate better health? To answer this, let us look at how we devour ghee and sugar. Also remember that each person requires a minimum of 2,100 calories and 60g of protein per day.
Undoubtedly, ghee, cooking oil and sugar have a special place in our culture. We are familiar with Urdu idioms mentioning ghee and shakkar. Two relate to our eating habits. We greet good news by saying ‘Aap kay munh may ghee shakkar’, which literally means that may your mouth be filled with ghee and sugar. We envy the fortune of others by saying ‘Panchon oonglian ghee mei’ (all five fingers immersed in ghee, or having the best of both worlds). These sayings reflect not only our eating trends, but also the inflation burden of the rising prices of these three items — ghee, cooking oil and sugar. Recall any wedding dinner. Ghee is floating in our plates.
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Kaushik Basu
@kaushikcbasu
One picture that sums up India’s biggest problem: youth unemployment. Sadly this is getting little policy attention. It can do lasting damage to the economy. We must shift focus from politics to correcting this.https://twitter.com/kaushikcbasu/status/1530375519186915329?s=20&am...
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Youth (ages15-24) #unemployment in #India is 24.9%, the highest in #SouthAsia region. #Bangladesh 14.8%, #Pakistan 9.2%. Source: International Labor Organization & World Bank https://data.worldbank.org/indicator/SL.UEM.1524.ZS?locations=PK-IN-BD
https://twitter.com/haqsmusings/status/1530565654616477696?s=20&...
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Fiscal deficit recorded at 3.8pc in 3 quarters
https://profit.pakistantoday.com.pk/2022/05/30/fiscal-deficit-recor...
The country’s fiscal deficit was recorded at 3.8 per cent of the Gross Domestic Product (GDP) during the first three quarters of the current fiscal year compared to the 3 percent deficit recorded during the corresponding period of last year.
The deficit during July-March (2021-22) stood at Rs2,565.6 billion compared to the deficit of Rs1,652.0 billion during July-March (2020-21), says Monthly Economic Update and Outlook, May 2022 released by finance ministry.
The increase in deficit has been observed on account of the higher expenditures due to the rise in subsidies and grants. It is expected that the expenditure side would come under further pressure in the remaining months of the current fiscal year.
Similarly, the primary balance posted a deficit of Rs447.2 billion against the surplus of
Rs451.8 billion during the period under review.
Meanwhile, on the revenue side, tax collection has been currently showing a remarkable performance by posting a growth of 29 percent during the first ten months of the current fiscal year.
The first ten months’ data shows that the revenue collection has surpassed the target by Rs237 billion. This is despite tax relief measures which have impacted revenue collection by approximately Rs73 billion just in the month of April 2022. Total revenues grew by 17.7 percent in July-March (FY-2022) against the growth of 6.5 percent recorded in the same period of last year.
Higher growth in revenues has been achieved on the back of the significant rise in tax collection, the outlooks says adding, total tax collection (federal & provincial) increased by 28.1 percent whereas non-tax collection declined by 14.3 percent during the period under review.
FBR has taken various policy and administrative measures which paid off in terms of improved tax collection during the current fiscal year. It is expected that with the current growth momentum, FBR would be able to achieve its target during FY 2022. Total expenditure witnessed a sharp rise of 27.0 percent during Jul-Marc FY2022 against a 4.2 percent rise in the same period of last year.
Higher growth in total expenditure during the period has been observed on account of 21.2 percent growth in current spending and 54.6 percent increase in development expenditures.
The government is taking all possible measure to counter the downside risks associated with the economy, which currently has been facing challenges to sustain growth it had achieved during the fiscal year 2021-22, says Monthly Economic Update and Outlook,
May 2022 released here.
“Although the economy of Pakistan has achieved GDP growth of 5.97 percent in FY2022, but the fiscal situation and external sector performance are making it difficult to sustain and impacting the growth outlook in coming year,” noted the report.
It says, the International commodity prices were on rising trend and expected to increase further, adding the pass-through of the increase in global commodity prices was somewhat contained due to government measures. Even then it is expected that Consumer Price Index (CPI) inflation will remain in double digit in May 2022.
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Pakistan’s generational shift
By Dr Ayesha RazzaqueMay 22, 2022
https://www.thenews.com.pk/print/959718-pakistan-s-generational-shift
Last year saw the publication of ‘Womansplaining – Navigating Activism, Politics and Modernity in Pakistan,’ a book edited by Federal Minister Sherry Rehman to which I was able to contribute a chapter. It connected education with women’s rights and argued that indigenous movements like the Aurat March should focus on education as a core part of their agenda.
Detractors of Pakistan’s women’s rights movement have been taking potshots at it by claiming that the issues it raises are not the issues of ‘real’ (read: rural) women. Put aside for a minute the fact that Pakistan’s rural population now accounts for 62 per cent, down from 72 per cent in 1980, and is on a steady decline. While the numbers may differ, and women’s power to negotiate may differ, rural and urban women share basic challenges and better education can yield similar opportunities and improvements in life circumstances.
Indigenous progressive and women’s rights movements have adopted the cause of education as an agenda item but should make it front and center, specifically K-12 education for girls in rural areas. New data further substantiates that connection with numbers. Education up to the higher secondary level, just the education that rural schools offer today, is the enabler that brings increased women’s labour force participation, delayed first marriage, lower rates of consanguinity, increased income, increased spousal income, and is a contributing factor to greater freedom of movement and communication – all positives.
Studies exploring the relationships between levels of education and life circumstances around the world are plentiful and capture the situation at a point and place in time. The Learning and Educational Achievements in Pakistan Schools (LEAPS) programme is qualitatively different because it already spans a period of almost two decades. The LEAPS programme has been tracking lower- and middle-income households in 120 randomly selected villages across three districts in rural Punjab since 2003. It has been revisiting them since then, most recently for the sixth time in 2018, roughly once every three years. That makes it one of the largest and longest panels of households in lower- and middle-income countries. This study is also unique as it looks at return on investment in education beyond an individual’s income and looks into the possible spillover into life circumstances and quality-of-life which is especially interesting for those interested in women empowerment and feminist movements.
In this latest round it surveyed 2006 women now aged 20-30. All these women were from the same 120 birth villages and have been tracked to their marital homes within or outside the village if they have married, migrated or moved for any other reason. Preliminary descriptive results of the long-running LEAPS study tell interesting stories. The headline finding of LEAPS investigators is that Pakistan is in the midst of a ‘generational shift’ where, for the first time in its education history, we have a ‘critical mass of moderately educated women’.
In this generation only 18.7 per cent of rural women are without an education, down from 75.5 per cent from their mothers’ generation. Nearly 50 per cent have an education ranging from a primary to secondary education, up from just 20 per cent in the previous generation. A stunning 22.9 per cent have a higher secondary or above education, up from an almost nothing 0.3 per cent in their previous generation.
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Existing plans, at least in the domain of education, remain unguided by some of the very excellent evidence that is available. Meanwhile, the Planning Commission is organizing a ‘Turnaround Pakistan’ conference perhaps as early as May 28 to conduct national consultations. Whether a hurriedly thrown together conference can change the way business is done remains to be seen.
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Pakistan says IMF is only resort, shut out of bond markets
Pakistan needs about $36 billion to $37 billion in financing for the fiscal year starting June, said Ismail. An IMF deal would help secure funds from other sources such as the World Bank and friendly nations including China.
https://www.aljazeera.com/economy/2022/5/30/pakistan-says-imf-only-...
Finance minister said that several countries are ready to offer help, but first want Islamabad to secure funds from IMF.
Pakistan’s government is unable to secure funding from the global bond market and commercial banks, making it even more important to secure an agreement with the International Monetary Fund, Finance Minister Miftah Ismail said.
Pakistan’s dollar bonds, which reached a record low this month, gained on Friday after the government raised fuel prices, a key benchmark for the IMF to resume its loan program. Pakistan is seeking to secure a staff-level agreement with the fund in June.
“All roads lead to the IMF,” Ismail said Saturday to a virtual conference. “Saudi Arabia and other countries are all ready to give money, but all of them say we need to go to the IMF first.”
Former Prime Minister Imran Khan reduced and froze fuel prices, stalling the $6 billion bailout program. His successor Shehbaz Sharif, who took office in April, banned luxury imports and the central bank raised borrowing costs more than expected this month to deal with all-time high imports.
Pakistan needs about $36 billion to $37 billion in financing for the fiscal year starting June, said Ismail. An IMF deal would help secure funds from other sources such as the World Bank and friendly nations including China.
Ismail ruled out raising funds from the global bond market and foreign commercial banks that have given short-term loans in the past. The decision was made after the nation is said to have picked banks JPMorgan Chase & Co., Citigroup Inc., Standard Chartered Plc and Credit Suisse Group AG to manage any bond sale.
The financing will help Pakistan increase its foreign exchange reserves to about $15 billion next fiscal year from about $10 billion. Pakistan faces $3.2 billion in dollar debt due this year, the highest amount in the next decade, according to data compiled by Bloomberg.
Pakistan’s financing needs will be comfortable if the nation secures the IMF program, acting central bank governor Murtaza Syed told investors and analysts last week.
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New growth
Sarah Nizamani
https://www.dawn.com/news/1692241/new-growth
Evidence confirms that economic growth occurs when countries are a part of global supply and value chains. But, what defines value changes. For example, Adam Smith in The Wealth of Nations lists some of the most unproductive professions — including that of churchmen, lawyers, musicians, dancers and sportsmen. He would be surprised to know how much money there is in these professions now. For Pakistan to achieve sustained growth, it needs to create value for the goods and services in global demand. There are no easy answers for how this can be achieved, but there are ideas to debate.
For 200 years, economic growth has been linked with manufacturing, but this may no longer be valid. Several reports show that many low-income countries might have missed the boat to developing industry. As pointed out by Ejaz Ghani and Stephen O’Connell, industrialisation needs two main factors to flourish: 1) enhanced availability of electric power; 2) higher capital investment. With power shortages and an inability to attract investment, Pakistan has struggled with both. However, evidence suggests there is still a chance for developing countries to shape their development pathways which lie in the service revolution. In Pakistan, the service sector has contributed more to growth than industry since 1950 and surpassed agriculture in 1965. In 2020, it employed 36pc of labour and contributed 54pc to GDP. The level of productivity measured at purchasing power parity is also higher than in industry.
Thanks to technology, the sector is no longer exclusively driven by domestic demand and services are globally tradable. This results in increased exports of trade in services. For example, Pakistani freelancers earned $150 million in FY2019-20 (in the absence of PayPal) and Pakistan was ranked fourth in the freelancers’ market (above India and Bangladesh). This proves that manufacturing is not the only driver of growth, and that the service sector is not only sustainable but also inclusive. If Pakistan can expand and improve its service sector, it may result in faster job creation and higher household spending. This would not mean giving up on industrialisation, but divorcing protectionism in the hope of better returns.
Still, there’s a need to recognise that services are an urban phenomenon and skill-centric, and may not bring prosperity to all in equal measure. To bring rural prosperity, there’s a need for inclusive capitalism to reach farmers, which means access to formal finance, informed policymaking, investment in agro-tech and autonomy in farming decisions. Skipping manufacturing to leapfrog to services is possible, but this cannot be done without raising farm incomes.
What is suggested here is to end the factory fetish and protectionism, keep away from subsidising land, credit and power, empower small farmers, remove growth constraints in agriculture, invest in people, and change the state’s role from regulator/inhibitor to enabler/value creator — and to remember that the only failure is the failure to envision a better future.
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Economic Survey 2021-22: Pakistan’s economy grew by 6%, says Finance Minister Miftah Ismail
"The situation in Pakistan has remained the same — whenever country records growth it, unfortunately, gets into crisis of current deficit,” says Miftah
https://www.thenews.com.pk/latest/964686-live-govt-launches-economi...
Finance Minister Miftah Ismail on Thursday unveiled the Economic Survey of Pakistan 2021-22, a pre-budget document, showing growth hitting 6% against the target of 4.8% in the outgoing fiscal year.
The finance minister unveiled the Economic Survey 2021-22, alongside Planning Minister Ahsan Iqbal, Power Minister Khurram Dastagir, and State Minister for Finance Ayesha Ghous Pasha in a press conference in Islamabad.
Miftah highlighted the performance and targets achieved or missed during the outgoing fiscal year — when the Imran Khan-led government was in power for the first nine months — that started on July 1, 2021, and will end on June 30, 2022.
The government achieved the most important economic target — GDP growth — and hence, it was less surprising that other goals were achieved as well.
"The situation in Pakistan has remained the same — whenever the country records growth it, unfortunately, gets into the crisis of current deficit,” said Miftah.
“The same has happened this time as well, the recent 5.97% growth recorded during the outgoing fiscal year 2021-22, according to new estimates, has pushed Pakistan towards the balance of payments and current account deficit crisis,” the finance minister lamented.
He further highlighted imports have increased by 48% as compared to the last fiscal year, while the exports also moved up. But noted that the trade deficit stood at $45 billion.
Miftah said that years before, the exports were around half of the imports. However, the export-to-import ratio stands at 40:60 now, he said, adding that Pakistan could only finance 40% of its imports through exports and for the rest, it had to rely on remittances or loans — which makes the country stuck in a balance of payment crisis.
"We also need inclusive growth. We have always facilitated the elite so they can boost the industry and benefit the economy. This is one strategy, but when we give privileges to the elite, then our import basket increases," he said.
A rich person spends a lot on imported items as compared to a low-income person, he said, adding that the government should financially empower the low-income groups to boost local production.
"If we do this, then maybe our domestic and agriculture production would increase, but it will not move up our import bill. This growth will be inclusive as well as sustainable," he said.
The finance minister added that since the energy prices are too high in Pakistan, therefore, the local industry is "uncompetitive and also shuts down at times".
Miftah said the gas supply for all industries has resumed after being shut for some time, noting that the supply to industries would not have been stopped had the PTI government entered long-term agreements.
The previous government did not make long-term plans, forcing Pakistan to buy energy and oil at expensive rates, which is worsening the economy of the country.
"And this is not PML-N, JUI-F, PPP, or the coalition government's economy whose economic situation is worsening; it is the state of Pakistan that is seeing an economic turmoil," he said.
The finance minister, while talking about the foreign direct investment (FDI), said it was around $2 billion in 2017-2018, but it stood at around $1.25 billion in the first nine months of the outgoing fiscal year.
Miftah said the trade and current account deficits have increased as compared to 2017-18 — the fiscal year when PML-N's government ended — as an "incompetent" ruler was imposed on Pakistan.
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Economic Survey 2021-22: Pakistan’s economy grew by 6%, says Finance Minister Miftah Ismail
"The situation in Pakistan has remained the same — whenever country records growth it, unfortunately, gets into crisis of current deficit,” says Miftah
https://www.thenews.com.pk/latest/964686-live-govt-launches-economi...
https://www.finance.gov.pk/survey/chapter_22/Highlights.pdf
Finance Minister Miftah Ismail on Thursday unveiled the Economic Survey of Pakistan 2021-22, a pre-budget document, showing growth hitting 6% against the target of 4.8% in the outgoing fiscal year.
The finance minister unveiled the Economic Survey 2021-22, alongside Planning Minister Ahsan Iqbal, Power Minister Khurram Dastagir, and State Minister for Finance Ayesha Ghous Pasha in a press conference in Islamabad.
Miftah highlighted the performance and targets achieved or missed during the outgoing fiscal year — when the Imran Khan-led government was in power for the first nine months — that started on July 1, 2021, and will end on June 30, 2022.
The government achieved the most important economic target — GDP growth — and hence, it was less surprising that other goals were achieved as well.
"The situation in Pakistan has remained the same — whenever the country records growth it, unfortunately, gets into the crisis of current deficit,” said Miftah.
“The same has happened this time as well, the recent 5.97% growth recorded during the outgoing fiscal year 2021-22, according to new estimates, has pushed Pakistan towards the balance of payments and current account deficit crisis,” the finance minister lamented.
He further highlighted imports have increased by 48% as compared to the last fiscal year, while the exports also moved up. But noted that the trade deficit stood at $45 billion.
Miftah said that years before, the exports were around half of the imports. However, the export-to-import ratio stands at 40:60 now, he said, adding that Pakistan could only finance 40% of its imports through exports and for the rest, it had to rely on remittances or loans — which makes the country stuck in a balance of payment crisis.
"We also need inclusive growth. We have always facilitated the elite so they can boost the industry and benefit the economy. This is one strategy, but when we give privileges to the elite, then our import basket increases," he said.
A rich person spends a lot on imported items as compared to a low-income person, he said, adding that the government should financially empower the low-income groups to boost local production.
"If we do this, then maybe our domestic and agriculture production would increase, but it will not move up our import bill. This growth will be inclusive as well as sustainable," he said.
The finance minister added that since the energy prices are too high in Pakistan, therefore, the local industry is "uncompetitive and also shuts down at times".
Miftah said the gas supply for all industries has resumed after being shut for some time, noting that the supply to industries would not have been stopped had the PTI government entered long-term agreements.
The previous government did not make long-term plans, forcing Pakistan to buy energy and oil at expensive rates, which is worsening the economy of the country.
"And this is not PML-N, JUI-F, PPP, or the coalition government's economy whose economic situation is worsening; it is the state of Pakistan that is seeing an economic turmoil," he said.
The finance minister, while talking about the foreign direct investment (FDI), said it was around $2 billion in 2017-2018, but it stood at around $1.25 billion in the first nine months of the outgoing fiscal year.
Miftah said the trade and current account deficits have increased as compared to 2017-18 — the fiscal year when PML-N's government ended — as an "incompetent" ruler was imposed on Pakistan.
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conomic Survey 2021-22: Pakistan’s economy grew by 6%, says Finance Minister Miftah Ismail
https://www.thenews.com.pk/latest/964686-live-govt-launches-economi...
https://www.finance.gov.pk/survey/chapter_22/Highlights.pdf
Miftah said the trade and current account deficits have increased as compared to 2017-18 — the fiscal year when PML-N's government ended — as an "incompetent" ruler was imposed on Pakistan.
Miftah said although coronavirus was once in a lifetime pandemic, the government missed historic opportunities. "After COVID, oil and gas were at record-low rates, which the PTI government missed."
He noted that although several lives were lost due to the pandemic, the country did not face much of a loss on the economic front as the G20 deferred the loan repayment of more than $4 billion and International Monetary (IMF) gave an additional $1.4 billion to Pakistan.
"The previous government did not consolidate it and could capitalise on it," the finance minister said, slamming the PTI for reducing the agricultural yield as Pakistan now has to import wheat from countries, that it would export in the pre-PTI era.
Miftah stressed that since Pakistan is a nuclear country, its export-to-GDP rate should be 15%. "The problem in Pakistan is not that our import is a lot, but the issue lies in our exports being less," he said.
'Historic loans'
The finance minister said the PTI government took "historic" loans during its tenure. Miftah added the government would be needing $3,100 billion for debt servicing this year and the $3,900 plus billion next year.
'Rebasing of economy'
For his part, Minister for Planning, Development, and Special Initiatives Ahsan Iqbal said the PTI government had rebased the economy, therefore, the latest numbers did not represent the “true picture”.
The planning minister said his sector, development, has taken the biggest hit in this economic survey as public investment had gone down, which ultimately shrunk private investment.
Iqbal said PTI decreased the development budget gradually and when the coalition government came into power, it was taken down to Rs550 billion.
"This was a huge contrast between the budget that we last presented. We had aligned 'two Ds' — the defence and development budgets were Rs1,000 billion," Iqbal said.
The federal minister said the defence budget was not slashed for development, but record taxes were collected to meet the demands of both sectors.
Pakistan’s future depends on ‘strong defence’
Iqbal added that Pakistan's future depends on a strong defence as well as development. He added that it was important to invest in education and creates avenues of employment for youth.
"If we do not do this, then a similar incident will happen like the one which took place at Karachi University, where a woman, who was studying doing her MPhil, blew herself up. The people facing poverty tend to move towards extremism," he said.
The planning minister recalled that during the PML-N's last tenure, the country was moving towards "vision 2025" when all of a sudden, we took a U-turn to "Naya Pakistan".
Iqbal said the coalition government was trying to bring the country back on track in terms of economic prosperity, but "at a price" — the revocation of subsidies.
He added that when the government was formed, it took one month to end the subsidies as it was trying to look for ways to refrain from shifting the burden on the masses.
Iqbal says PM Shehbaz wants charter of economy
Moving on, Iqbal said the development had stood at "0%" during PTI's tenure, and the current government wanted to revive the economy in its quest to invest in this sector.
Pakistan is behind Bangladesh in every sector despite Dhaka gaining independence 25 years after Islamabad, Iqbal said, noting that it was time the nation thinks about development seriously.
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