Overseas Pakistanis send money to Pakistan during the last ten months is 28.7 billion, a record high remittance to the country. In the previous two decades, Pakistan’s economy has grown steadily. Annual per capita growth has averaged only 2%, less than half that of South Asia, owing to inconsistencies in macroeconomic policy and reliance on investment and exports to promote economic growth. Short bursts of high consumption-fueled growth frequently resulted in the large current account and budgetary deficits, necessitating policy tightening and resulting in cyclical boom-bust cycles.
There have been signs of a shaky rebound in the first half of FY21 (July to December 2020). Private consumption has risen due to increased community mobility, bolstered by record official money transfers to Pakistan increased. Investment is also thought to have recovered slightly since machinery imports and cement sales grew by double digits.
Crop production was relatively weak in the first six months of FY21 due to solid monsoon floods, which negatively impacted cotton yield. Following the gradual easing of lockdown measures beginning in May 2020, indices of industrial and services activity have improved, with “Large Scale Manufacturing” and business confidence indices surpassing pre-COVID levels in December 2020. As a result, it is projected that the bulk of the crisis-affected informal workers would be able to return to work.
What Are The Chances Of Pakistan Economy’s Growth During Fiscal Year 20-21?
According to the Pakistan Development Update published recently, Pakistan’s economic growth is predicted to reach 1.3 percent in FY2021 and then strengthen to an average of 2.7 percent in FY2022-23. However, considering the third and most contagious wave of the epidemic presently circulating globally, the baseline economic growth prediction is exceedingly dubious.
As online money transfer to Pakistan is increasing steadily by tenth consecutive months, according to a recent assessment, the Pakistani economy will resume recovery in the current fiscal year 2020-21. However, economic activity will stay below pre-outbreak levels. On the budgetary front, the country’s primary balance achieved a surplus of Rs416 billion in the first half of FY 2021 (July to December), up from Rs153 billion the previous year.
The government was able to attain a budget surplus thanks to increased tax revenue. During the July-December fiscal year 2021, tax receipts increased by 6.0 percent to Rs 2915 billion, up from Rs 2750 billion the previous year. For many years, the services sector has been a primary growth engine, with provisional projections showing a 4.43 percent increase this year. Because of again in marketable surplus, the wholesale and retail trade sector rose by 8.37 percent. Expatriates send money to Pakistan online is also among the top economic growth factors.