Amid Covid-19, economy witnesses considerable recovery in 5 months of FY21

ISLAMABAD: Monetary and Fiscal Policies Coordination Board on Thursday apprised that as a result of continued domestic economic activity, the economy witnessed a considerable recovery amid Covid-19 during the first five months of Fiscal Year 20-2021.

The meeting of the Monetary and Fiscal Policies Coordination Board was held here under the chairmanship of the Minister for Finance & Revenue Dr. Abdul Hafeez Shaikh.

The meeting was attended by Adviser to Prime Minister on Commerce & Investment, Deputy Chairman Planning Commission, Governor State Bank of Pakistan; Dr. Asad Zaman (member) and other senior officials of the Finance Division. Chairman FBR also attended the meeting on special invitation.

According to statement issued by the finance ministry, the Finance Secretary while presenting the current economic situation apprised that the timely actions taken by the government mitigated the severe impact of pandemic on economy as compared to the other economies of the world.

“The economy has witnessed a considerable recovery during first five months of FY2021 as a result of continued domestic economic activity,” he said.

Governor SBP briefed that Monetary Policy was accommodative due to COVID-19 and has paved way for economic recovery during first quarter of FY2020-21.

There is an improvement in the country’s external accounts, he said adding the steady worker remittance inflows and improved trade balance of goods and services were the notable developments.

In his remarks, the Deputy Chairman Planning Commission stated that the first two quarters of the FY21 were marked by a rebound in economic activities amid COVID-19.

The economic recovery can be attributed to accommodative fiscal policy. He further stated that Large Scale Manufacturing and Housing Sectors have started showing signs of growth and improvement.

Adviser for Commerce & Investment mentioned that during July-November FY2021, Pakistan’s trade deficit has registered modest improvement as exports increased by 2% (Year-on-Year basis) growth, while imports remained stagnant.

He reiterated that the fiscal policy reforms being undertaken under the National Tariff Policy must continue.

Adviser Commerce also added that domestic industry, especially export oriented, should be provided needed support to expand their operations. Similarly, the inflationary pressures must be kept in check to ensure competitiveness, he added.

Dr. Asad Zaman, member appreciated the timely fiscal and monetary measures taken by the government during challenging times. He further mentioned that comprehensive data analysis was a key to rational decision making.

On the occasion, Minister for Finance and Revenue emphasized the active role of Monetary and Fiscal Policies Coordination Board for designing policies to address economic challenges.

He directed to make this platform more effective for achieving better coordination among all concerned to attain desired macroeconomic goals.

He also stressed the need for timely provision of economic data for effective policy making.

The Board should be more proactive in reviewing the impact of Fiscal and Monetary Policies on economic growth, employment, investment and external sector of the economy, he concluded.