Pakistan to enter growth phase in 2020 as stabilization period ends, says Umar

• Asad Umar said the growth phase of Pakistan would begin from August 2020.
• Federal minister says the taxation policy should help in increasing the pace of economic growth.

Minister for Planning and Development Asad Umar has said that Pakistan would see economic growth in the coming financial year, as the country would come out of the stabilization period.

Talking to local media, Umar said that the growth phase of Pakistan would begin from August 2020. “I am not saying that we would see 6pc growth rate on immediate basis, but the much needed stabilization process would end in coming months,” he said.

The World Bank, in its latest reportGlobal Economic Prospects, projects growth in Pakistan to languish at 3 percent or less through 2020, as macroeconomic stabilization efforts weigh on activity.

The World Bank said that growth in Pakistan decelerated to an estimated 3.3 percent in FY2018/19, reflecting a broad-based weakening in domestic demand. Whereas, US rating agency, Fitch forecasts Pakistan GDP growth at 2.8pc in FY20 from 3.3pc in FY19.

Speaking about tax issues, the former finance minister said that any taxation policy introduced should help in increasing the pace of economic growth. If one use a tax policy that hampers economic growth, would not increase tax revenue in the long run but diminish it, he said.

“The progress of economy leads to wealth creation, which is then used to increase tax revenue, it doesn’t work the other way around,” said Umar.

He informed that the current government is determined to establish four economic zones in all provinces. He said that feasibility for ML-1 project has been prepared and some $9 billion would be spent to improve the railway system.