On Thursday, Finance Minister Miftah Ismail, during a press conference held to review government’s economic performance, disclosed Economic Survey 2021-2022 with high expectation that the foreign exchange reserves at State Bank of Pakistan will rise to $12 billion in coming days after the inflow from China is recorded. This statement came a day before the government announces its budget of the upcoming Fiscal Year 2022-2023. Miftah succeeded Shaukat Tarin as the country’s finance minister during mid-April and chaired the launch ceremony of Economic Survey 2021 -2022. Miftah told during the press conference that as per new estimates, this year Pakistan achieved a GDP growth of 5.97% but the issue is that as soon as Pakistan’s economy sees growth, the current account deficit goes out of control and there is a balance of payments crisis.
The Finance Minister said that exports have increased but with a massive trade deficit. “WE will see record imports of $76-77billion, which is the highest not only in absolute terms but as per the GDP ratio as well.” He further added that this is a matter of great concern that we can only finance 40% of our imports through our exports whereas for the remaining 60% we have to rely on loans and remittances. As foreign reserves have fallen, but they will increase to around $12 billion after receiving $2.4 billion from China in coming days. Miftah said that Pakistan needs to correct its economic direction and that they are compelled to raise petroleum rates due to oil prices hiking to $120-$123 per barrel. Miftah praising his own government said that we have averted a default and stabilized the economy. He criticized the previous government saying that Pakistan Tehreek-e-Insaf (PTI) should have made long term agreements by taking advantage of the pandemic induced plunge in global energy prices which would have averted prevailing inflation. By providing subsidies to wealthy and industrialists we increase our import basket and is a strategy for boosting economic growth. The domestic and agricultural growth will increase by providing facilities to poor masses to enhance their spending power.
Telling about Foreign Direct Investment (FDI) he added that it stood $2 billion in 2017-2018, which is ow at 1.25 billion in the first nine months. He said that challenging part of growth in Pakistan is to make it sustainable and inclusive.
Economic survey is based on the performance of different sectors of the country which are agriculture, industry and services and also highlighting the performance of other sectors like health, energy, capital market, transport, education and communication, inflation, trade and payments, population, public debt, climate change and social protection.
Presently Pakistan faces multiple economic crisis including dangerous balance of payments position, rising inflation and pending outcomes of arrangements with multiple lenders like International Monetary Funds (IMF) which has put pressure on State Bank of Pakistan whose foreign reserves have fallen below $10 billion.
This economic review covers multiple issues like pandemic, Russian-Ukraine war and US withdrawal from Afghanistan last year which has taken massive toll on economy.