Sunday, April 21, 2024

Pakistan’s Economy Shows Positive Signs Despite 3rd Wave of COVID-19

The Ministry of Finance stated that business morale is improving, as evidenced by industrial growth, and that expectations of economic recovery are strengthening.

On the basis of improved consumer trust as evidenced by industrial development, expectations of economic recovery are strengthening. In its most recent Monetary Policy Statement, the State Bank of Pakistan expects higher growth in fiscal year 2021 than previously anticipated.

During July-January 2020-21, the fiscal deficit was 2.9 percent of GDP (Rs.1309 billion), down from 3.2 percent (Rs.1430 billion) the previous year. The primary balance remained in surplus in July-January 2021, rising by 0.9 percent of GDP to Rs.416 billion, compared to Rs.153 billion, 0.3 percent of GDP in the same time last year.

Remittances rose by 24.1% from July to February 2020-21, but exports fell by 2.3 percent to $16.1 billion from $16.4 billion, while imports increased by 8.6% to $32.1 billion from $29.6 billion.

Foreign direct investment fell 29.6% to US$1.3 billion from US$1.854 billion, and portfolio investment fell to -US$132.2 million from US$2.161 billion during the period under review, compared to -1.5 percent the year before. The total amount of foreign investment, including FDI and portfolio, fell by 77.1 percent.

The fiscal output from July to January 2021, according to the Ministry, demonstrates that the fiscal consolidation strategy aided in maintaining fiscal discipline, rising revenues, and controlling expenditures.

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