ZAHEER ABBASI & NUZHAT NAZAR
ISLAMABAD: The government said on Tuesday that the economic numbers of the fourth quarter of the current fiscal year would be even greater than those of the last previous quarter as large-scale manufacturing (LSM) growth for the month of April is over 20 percent besides increases in remittances and exports.
Minister for Planning and Development Asad Umar at a press briefing, after a cabinet meeting said that provisional estimates of 3.94 percent growth for the current fiscal year was being questioned by some people.
He said that “the numbers of last (fourth) quarter would be even stronger as economy is growing very fast.”
The minister said that soon after the provisional GDP growth estimate for the current fiscal year were released by the National Account Committee (NAC), a discussion had started.
He said that there was nothing new in the numbers as the data that provided a basis for 3.94 percent growth was being released every month and after every few months but no one questioned it before.
The minister said he could understand the reaction of the opposition parties, especially the Pakistan Muslim League (N), because it was beyond their expectations that the government would be able to recover so quickly despite Covid, “from the economic mess left behind by them.”
The minister said that provisional GDP growth estimate of 3.94 percent was being questioned on the basis of the International Monetary Fund’s (IMF’s) and the World Bank’s (WB’s) projections, and stated that both the financial institutions’ projections for the last fiscal year have also proven wrong.
The minister elaborated that the IMF and the WB had projected that Pakistan’s economy would contract by negative 1.5 to two percent in 2019-20, whereas, National Account Committee’s (NAC’s) provisional estimate was of 0.38 percent, which has now proven almost right as last fiscal year the NAC’s provisional estimate was slightly revised downward to 0.47 percent with only 0.9 percent decrease.
The IMF and the WB have been looking at the economies of over 150 countries, whereas, there is one department in the country that regularly monitors the data of various sectors of the economy, he added.
Umar added the prime minister’s decision to protect the weak segments during the Covid-19 was the basis of providing foundations for better economic performance and subsequently a strategy was given to the NCOC to create a balance between Covid and protecting the poor.
“The disbursement of Rs200 billion, under the Ehsaas programme, cash assistance to every third family in the country for household expenditure was another factor besides the State Bank of Pakistan’s (SBP’s) timely decisions and Finance Ministry’s stimulus package that provided confidence to businesses.” He said.
Additionally, he added, the prime minister’s personal interest in the construction sector and negotiation with the IMF managing director for taking relief for the sector were the factors that provided a basis for growth.
He said that now some numbers he would share with the media, which are not new because these were being either reported on a monthly basis or after even few months and no one ever questioned them.
He said that overseas Pakistanis had sent an additional $5.4 billion remittances during the first 10 months and there is expectation that it would be $6.5 billion more by the end of the fiscal year. This increase in remittances mean people of the country had additional Rs 1,000 billion in the hands of Pakistanis to spend, the minister said, while adding that there would be more than 10 percent growth in exports.
The minister added that more than half of the population is associated with the agriculture sector, which showed historic and bumper crops in four out of five crops.
We have been getting monthly data of 10 percent growth in large scale manufacturing (LSM) with average growth of nine percent for the first nine months, while there is more than 20 percent growth in LSM for April 2021.
He said that agriculture and industry constitute 50 percent of the economy and wholesale and retail, a large sector, is connected with the production sector and growth, “and it logically would lead to growth in services sector attached with it”.
The minister said that credit to the private sector is considered a good indicator for industrial activity and there was an increase of 60 percent in credit to private sector during the first nine months and more importantly there was an increase of Rs126 billion in credit being taken by the investors for establishment of new factories.
He said that “replacement of Hafeez Shaikh was not indictment of performance but style of governance of Prime Minister Imran Khan, who never gets satisfied and is always in search of better results.”