The government is likely to revise GDP growth rate downward to around 2 percent against the budgeted 2.4 percent for the current financial year 2019-20, as the economy has suffered loss of around $20 billion so far on account of Coronavirus outbreak.
This was the consensus among economists and government officials while talking to Business Recorder here on Monday.
Dr Salman Shah, Advisor to the Chief Minister of Punjab on Economic Affairs and Planning & Development told Business Recorder that the country is suffering around 4 percent of GDP loss per month due to lockdown. "The economy has suffered a loss of around 6 percent of GDP or $15-$20 billion so far," said Dr Shah, adding the economy will continue to shrink till uncertainty is cleared.
He further said that currently the whole country is shutdown and the economy is going in reverse or negative. The government is currently focused on public health and safety as well as to help the vulnerable segments of society, he added.
Former Advisor to Finance Ministry, Dr Ashfaq Hassan Khan said that GDP growth would be around 2 percent to 2.5 percent. The wheat, cotton, rice and sugarcane crops have arrived and there is no impact of coronavirus on its production. Further livestock and diary would register around 3.5 percent growth. Large Scale Manufacturing (LSM) is negative 3 percent while Small and Medium Enterprises (SMEs) registered around 6.5 percent growth while banking and insurance sectors would register good growth, said Khan, adding that that all these areas contribute to GDP and they are not affected by coronavirus.
Replying to a question about negative GDP growth projection, he said that these people do not know how to measure economy of Pakistan.
Officials in the Planning Ministry said that real GDP growth would be in the range of 2 percent to 2.6 percent. Coronavirus negatively affected the economy as lockdown was imposed by mid-March; still the country is expected to register positive growth. If lockdown is relaxed by mid-May, there will still be one and a half months left in the current financial year and the economy would grow, but if not relaxed, GDP would shrink to around 2 percent in 2019-20, the official added.
In response to Business Recorder query, Teresa Daban Sanchez, International Monetary Fund (IMF) Resident Representative in Pakistan sent a copy of the staff report, according to which real GDP is projected to decline to -1.5 percent in fiscal year 2020 as a result of a severe contraction in output during the last quarter of the fiscal year.
Moody's Investors Service has lowered its forecast for Pakistan's growth and projected a modest contraction of 0.1-0.5 percent for fiscal year 2020 because of the growing impact of Covid-19 crisis.
Pakistan may fall into a recession and real GDP for fiscal year 2020 could contract by 2.2 percent accompanied by a painful decline in per-capita income, said the World Bank.
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