© Reuters. FILE PHOTO: Farmers plant saplings in a rice field on the outskirts of Lahore, Pakistan July 16, 2019. REUTERS/Mohsin Raza
ISLAMABAD (Reuters) – Pakistan lowered its GDP growth forecast for the current fiscal year, ending June 30, to 0.29% from 2%, the country’s national accounts committee said in a statement, as a slowdown in the agriculture and industrial sectors curbed growth.
Gripped by economic turmoil and suffering a balance of payments crisis, Pakistan is trying to reach agreement with the International Monetary Fund (IMF) to disburse the stalled final $1.1 billion from a $6.5 billion bailout agreed in 2019.
Pakistan’s central bank said on Friday GDP growth was likely to remain significantly lower for financial year 2022-23 than the previous year, when growth was revised up to 6.1%.
The committee corrected its previous year’s GDP growth numbers, which a spokesperson said was a typographical error.
The country posted highest ever inflation at 36.4% in April and its currency has depreciated to a historic low.
The national accounts committee’s latest GDP growth forecast is lower than the World Bank’s estimate of 0.4%, while the IMF said in April that the growth would be 0.5%.
A government official amended the rate for 2021-22 growth to Reuters in Islamabad.
(This story has been officially corrected to say that the 2021-22 growth rate was 6.10%, not 5.77%, in paragraph 3)
Pakistani government has slashed Provisional Gross Domestic Product (GDP) growth rate for the coming Financial Year 2022-23 to 0.29 percent in the Budget 2021-2022.
The State Bank of Pakistan’s real GDP growth forecast for the current FY2020-2021 was estimated at -0.4 percent, which is even lower than the budgeted growth of 0.5 percent.
This is the lowest GDP growth rate in the history of Pakistan. In comparison, in Fiscal Year 2020-21, Pakistan had recorded a GDP growth of 2.7 percent.
This dramatic decline of GDP is mainly due to the Covid-19 pandemic and its consequential economic lockdown in the country. The services and industry sectors were hit hard by this economic slowdown as the government remained reluctant in providing any economic relief or financial packages to the private sector.
The government is hopeful of achieving a better growth rate and reversing the trend in the coming FY 2022-23. In order to achieve this target the government has announced several economic measures in the budget. These measures include the alleviation of taxes, the abolishment of various cess taxes, the launch of new economic programs, various incentives to the IT sector, reduction of cost of doing business and various credit schemes for small and medium enterprises.
At present, the government is focusing on promoting export industries, local production, encouraging Overseas Pakistani’s remittances, increasing investments and further simplifying the tax collection process to encourage businesses.
Therefore, it is expected that with these measures and focused development programs the country, with the help of God, will be able to overcome the current economic crisis and spur economic growth in the coming fiscal year.