The performance of Pakistan’s agricultural sector has been critical in helping the country’s economic revival, with the government pledging more support.

Pakistan bares 3.94% GDP growth target, almost double IMF, World Bank forecasts

Dubai - Agricultural, industrial and services sectors driving economic revival and rosier outlook

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By Muzaffar Rizvi

Published: Fri 21 May 2021, 10:02 PM

Last updated: Fri 21 May 2021, 10:05 PM

Pakistan estimated provisional GDP growth for the 2020-21 financial year at 3.94 per cent, which is almost double the forecasts from the International Monetary Fund (IMF), the planning ministry said on Friday.

In a statement, the ministry attributed higher economic growth to the better performance in the agricultural, industrial and services sectors.

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“The provisional growth of GDP for the year 2020-21 has been estimated at 3.94 per cent which is based upon growth estimates of the agricultural, industrial, and services sectors,” the ministry said.

The IMF and World Bank has estimated GDP growth of 1.5 per cent and 1.3 per cent, respectively, as the Covid-19 pandemic forced the government to impose curbs on businesses in order to slow the spread of the infection.

The agricultural, industrial and services sectors are expected to grow at 2.77 per cent, 3.57 per cent, and 4.43 per cent, respectively.

Pakistan’s economy contracted 0.4 per cent during fiscal year 2019-20 due to a worldwide economic slowdown due to the coronavirus pandemic.

Newly-appointed Finance Minister Shaukat Tarin said Pakistan will go for an ambitious six per cent economic growth target in the next two years as the IMF shows its willingness to renegotiate tough conditions for a $6 billion loan in the wake of rising Covid-19 cases. “The federal government will earmark as much as Rs900 billion [$6 billion] for development expenditure in the year beginning July. That’s the bare minimum we need for a country this size,” he said.

Dr Reza Baqir, governor of the State Bank of Pakistan, said the national economy is on the brink of higher growth after key sectors reboubded during the fiscal year ending on June 30.

He attributed the growth to large-scale manufacturing, automobiles, agriculture and other important sectors.

“We have strong economic indicators this year despite the Covid-19 pandemic challenges and this is a good omen for the economy,” Dr Baqir told Khaleej Times in Dubai last week.

Dr Ashfaq Hassan Khan, member of the Economic Advisory Council that is headed by Pakistani Prime Minister Imran Khan, said the economy registered a smart recovery after a 0.4 per cent contraction in the previous financial year. “It is a positive surprise as the economy still facing multiple challenges,” Dr Khan told Khaleej Times on Friday.

“I will atttribute higher economic growth to large-scale manufacturing and agriculture sectors,” Dr Khan elaborated.

“Our main crops wheat, rice and maize helped agriculture to post 2.7 per cent growth, while large-scale manufacturing also recorded strong improvement this financial year,” he added.

Muzammil Aslam, chief executive of Tangent Capital Advisors, said the GDP estimate now revised up at 3.94 per cent, “[has] further room to improve to five per cent once final numbers” come.

“Importantly, Pakistan is gaining food security. All major crops increased from eight to 22 per cent. This will improve the livelihood of masses,” Aslam told Khaleej Times on Friday.

Samiullah Tariq, head of research at Pakistan Kuwait Investment, said the country’s economy has a potential to achieve higher growth in coming years.

He said IT, e-commerce, the Internet and cellular sectors have huge potential to help achieve much higher GDP growth in the next five years.

“High single-digit growth is going to be a new normal in years to come,” he said.

— muzaffarrizvi@khaleejtimes.com

Muzaffar Rizvi

Published: Fri 21 May 2021, 10:02 PM

Last updated: Fri 21 May 2021, 10:05 PM

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