Data proves performance of Imran Khan Government was outstanding

Today the financial wizkids of PDM government, headed by Shehbaz Sharif Sharif, presented Economic Survey of Pakistan. This annual document is released one day before the announcement of Federal Budget. The details for first nine months of FY22 show that the performance was far above the targets.

GDP growth rate was 5.97% against a target of 4.8%. This overall growth came on the back of 4.40% growth in Agriculture, 7.19% growth in Industries and 6.19% growth in Services — all three major sectors surpassed their targets of 3.5%, 6.5% and4.7% respectively.

I am amazed at the wit of Finance Minister Miftah Ismail. He said "achieving growth was not an issue for Pakistan; the real issue is achieving sustainable growth". "This year GDP growth is 5.97% ... but as usual the current account deficit has once again shown that we have a balance of payments issue," Ismail said.

He said, the country's growth story — having rebounded from the pandemic and maintaining a V-Shaped recovery by posting real GDP growth of 5.97% was dampened in the face of glaring macroeconomic imbalances, suggesting that this growth is unsustainable.

"Despite the encouraging export performance, the country’s imports have also risen significantly. The broad-based surge in global commodity prices, Covid-19 vaccine imports and demand-side pressures, all contributed to the rising imports," said the minister.

Resultantly, trade deficit grew by 55.5% and amounted to US$32.9 billion or 8.6pc of the GDP, which is "historically high".

Despite export receipts and workers’ remittances both reaching record-high levels, import payments registered a sizable, broad-based increase. As a result, the current account deficit widened considerably over last year.

These payment pressures manifested on the interbank PKR-US$ exchange rate, which depreciated by over 14% during Jul-Mar FY2022. Foreign exchange reserves held by Pakistan’s central bank also came under pressure, dropping US$5.9 billion to US$11.4 billion by end March 2022.

"The widening of the current account deficit together with a build-up in inflationary pressures in the backdrop of the geopolitical situation, especially the Russia-Ukraine conflict, created significant challenges for sustainable economic growth.