ISLAMABAD: The Finance Ministry has termed the upsurge of Covid-19 infections as a major risk to the scenario of economic recovery on a path of external and internal balance as restrictions may be imposed in some sectors to protect the health of the people.
Monthly economic update and outlook for November 2020 uploaded by the Finance Ministry on its website noted that a major risk to this scenario of economic recovery is the upsurge of Covid-19 infections, all over the world and also, to a lesser degree, in Pakistan.
Like governments in other parts of the world, Pakistan government also intends to preserve the health of the people by imposing a number of restrictions in some sectors and areas of the economy.
The effects on the economic outlook will depend on the intensity and duration of these restrictions.
Specific well-designed government policies may soften the economic burden of these necessary restrictions.
On the other hand, very recent world-wide communications regarding the production of several very successful new vaccines may open the scope for opening a back-to normal path in the near future.
These developments may boost business and consumer confidence and further enhance economic growth.
Pakistan economy showed strong growth in the first four months of the current fiscal year with no significant deterioration in the balance of trade in goods and services is expected, inflow of workers' remittances remains strong.
According to outlook during the first quarter, fiscal deficit was increased to 1.1 percent of GDP against 0.7 percent recorded last year, but remained below the target set for the first quarter.
The total tax revenues (federal and provincial) stood at Rs1,068.9 billion, which represents growth of five percent.
The provisional tax collection by the FBR has increased by 4.5 percent to during first four months of current fiscal year with total tax collection has increased to Rs1,440 billion from Rs1,282 billion, however, there was a decline of 15.2 percent in non-tax revenue in the first three months of current fiscal year with collection of Rs356 billion as opposed to Rs420 billion for the same period, a year before.
There was an increase to 10.6 percent in consolidated expenditure after these have risen to Rs1,963 billion as opposed to Rs1,775 billion during the period under review.
The ministry claimed that PSDP authorization stood at Rs299.7 billion till 20th November 2020 against Rs289 billion for the same period a year before.
Remittance showed a growth of 26.5 percent during the first four months of the current fiscal year, exports contracted by 10.3 percent from $8.2 billion in 2019-2020 to $7.3 billion, and imports four percent from $14.7 billion in the first four months of the last fiscal year to $14.1 billion during the same period of the current fiscal year.
As a result, trade deficit increased by four percent.
Current account balance increased from negative 1.6 percent last year four months to positive 1.3 percent in the first four months of ongoing fiscal year, according to outlook. Total foreign direct investment (FDI and portfolio investment witnessed a decline of 62.2 percent for July-September and July October 2020-21 as opposed to July-October for the last fiscal year as it decreased from $1,124 million to $425.5 million.
The credit to private sector was recorded negative Rs49.4 billion during July-October 2020-21 compared to Rs6.6 billion negative for the same period a year before.
The government to achieve production targets of Rabi 2020-21 crops, the government has announced "Rabi Package" to reduce the input cost for the farmers with the special intent to increase the production of wheat in the country.
According to this package, Minimum Support Price (MSP) of wheat has been increased to Rs1,650 per 40kg from Rs1,400 per 40kg in 2019-2020 seasons.
Besides this, a subsidy of Rs1,000 per 50kg bag of DAP and other P&K fertilisers.
The federal and provincial governments will share the subsidy in 70 percent and 30 percent ratio.
A subsidy on weedicides Rs250 per acre and fungicides Rs150 will be given by the federal government as a part of the Rabi Package.
Copyright Business Recorder, 2020
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