Pakistan’s government targets a 6% economic growth
Pakistan agreed to a $6 billion loan programme in July 2019 after receiving more than 20 IMF bailouts during the previous five decades.
According to a Pakistani expert, the economy is on target to develop at a rate of 5% this year, allowing Pakistan to leave the International Monetary Fund (IMF) in September.
Shaukat Tarin, the finance minister, who has played a key role in the country’s economic reforms, anticipates GDP to expand by 6% in the coming fiscal year, which begins in July.
We will not require IMF help if we attain a sustained growth rate of 6%. “I don’t think we need another IMF programme after the current extended fund facility (EFF) ends in September,” Tarin told media in a special discussion.
Pakistan finalized a $6 billion debt arrangement with the IMF in July 2019, after getting more than 20 IMF bailouts over the previous five decades.
Over the next two weeks, the IMF will conduct a seventh evaluation of Pakistan’s economy, which will begin today. After the eighth and ninth evaluations, the remaining $2 billion will be available by September, as we met the benchmarks in December,” Tarin added.
Pakistan has been experiencing a significant economic rebound since the summer of 2020, as a result of the EFF program’s maintenance of budgetary buffers before the outbreak of the Covid-19 epidemic. Pakistan’s GDP is expected to expand by 4% in 2020, according to the IMF.
The research warned that rising geopolitical tensions, Covid-19 flare-ups, and delayed structural reforms remain dangers to Pakistan’s economy.
We are certain of accomplishing this goal under Prime Minister Imran Khan’s leadership, and we will lessen our reliance on the IMF and other multinational currencies, according to the finance minister.
Despite the global commodity price shock, he claims that the government’s economic measures have resurrected sick industries, improved agriculture, and increased exports. The country needs to boost its saving rate and increase income collection to retain its growth pace in the next years.
We are working hard to close the trade gap, in addition to raising savings rates and tax collections. “We will collect Rs6 trillion in the first year of the new tax cycle, and Rs8 trillion in the second year,” Tarin added.
Experts believe Pakistan’s savings rate should be increased to 25% from the existing 15%.aid. The tax-to-GDP ratio should also be increased from 10% to 20% to maintain stronger solid growth.
We predict traditional exports to reach $60 billion in the next five years, and IT exports to reach $50 billion. This would increase our annual exports to more than $100 billion. “The annual remittances of $30 billion will ensure a sustainable current account surplus,” he stated.
In the next ten years, up to 85 million jobs in China are likely to be shifted abroad. “China should relocate its important manufacturing operations to special economic zones in Pakistan, resulting in the transfer of at least 10 million employment,” he stated.
China’s finance minister responded to a query by saying that the country was expanding imports from Pakistan, which would enhance production and generate more job chances.
There is no doubt that Pakistan’s economy is on the rise, with agriculture, industries, and the services sector all functioning well. This supercycle, on the other hand, is placing downward pressure on prices and increasing anger and frustration.
We must be cautious not to let the anger flow onto the streets, and if we can maintain this pace for the next six to nine months, we will be fine for the next general election in 2023,” the finance minister stated.