Budget 2020-21: Business leaders dismiss budget, expects economy to worsen further

Business leaders and executives have dismissed the federal government’s recently announced budget 2020-21, saying that the budget measure will have no impact on the economy and businesses of the country, as business leaders expect further economic deterioration in the coming months.

These were the findings of a survey conducted by Alpharabi, an Independent Research & Analytics Platform under Alpha Beta Core. The firm conducted a survey of over 150 CEOs, corporate & business leaders, and executives, representing leading businesses and industries of Pakistan, regarding the Federal Budget FY21, challenges pertaining to the Covid-19 and the overall business & economic outlook of the country for the next 12 months.

To a query regarding the budgetary impact on the overall economy, an overwhelming 59.5 percent of the business leaders were of the view that the Federal Budget FY21 had no impact on the overall economy, whereas, 27.5pc were of the view that the recently announced budget had a negative impact on the overall economy.

To another question, regarding the budgetary impact on overall business & industry, some 60.8pc were of the view that the budget largely will have ‘no impact’ on overall business and industry. When asked about the impact of changes in duties & taxes on business, a majority i.e. 66.7pc of the business leaders saw ‘No Impact’ in their businesses.

To a query regarding the impact of Covid-19 on their business & industry, an overwhelming 60pc of the respondents were of the view that the pandemic had an ‘Adverse’ or ‘Very Adverse’ impact on their businesses.

To a question, ‘Are Measures taken in the budget enough to deal with Covid-19 and revive the economy? An overwhelming majority said that the ‘budget fails to address’ core issues. Regarding what strategy, business leaders think need to be implemented over the next 12 months in light of budget, a majority i.e. 58.6pc said that they would focus on Cost Rationalization, whereas, 33.8pc seeks to focus on Growth Opportunities, while the remaining see no change in the current strategy.

When questioned, how do you see economic & business performance over the next 12 months versus the current period? A majority of the business leaders i.e. 58pc said that they expect the economy to worsen off, however, 41pc were of the view that the businesses would stay afloat.