Economic Survey 2021: Shaukat Tarin says Pakistan moving towards growth

ISLAMABAD: Finance Minister Shaukat Tareen Thursday launched the Pakistan Economic Survey 2020-21, saying the country is moving towards growth.

At the beginning of his press briefing, the finance minister praised PM Imran Khan's initiatives to support businesses in Pakistan during the coronavirus pandemic.

He said many people lost their jobs when the pandemic hit Pakistan, however, due to the prime minister's visionary policy of not imposing a complete lockdown across the country, millions of people who were unemployed were hired again.

"The economy is recovering," he said.

He said the government had, itself, expected the economy to grow by a meager 2.1% this year and the IMF, World Bank, had released ever lower estimate.

However, he said the economy had grown by 4.4% due to impressive decisions by the government, which included incentivising manufacturing, subsidising electricity and providing assistance to the agriculture sector.

"Large scale manufacturing grew nearly by 9%," he said. 

Tarin speaks of 'record-breaking' remittances

Tarin said Pakistan's remittances had broken records, adding that they had crossed the $26bn mark. He said that lately imports, especially food in the form of wheat and sugar, were increasing as Pakistan's economy was growing at the same time.

"This shows the confidence that overseas Pakistanis have in Prime Minister Imran Khan," said the finance minister.

"We were net exporter of food but now, we have become a net importer," he said. "Our exports registered a growth but our remittances increased manifold," he added.

The finance minister addressed criticism that the government was increasing debt. He said it was inevitable that the debt had to rise considering there was a fiscal deficit in the country.

"The total debt has only increased by Rs1.7tr from 2020-21," he said, adding that it was a huge decline compared to the previous years.

"I'm not saying it's a commendable thing that our debt is growing," he said. "I am not saying that. But you can see stability [in the economy] return slowly," he added.

He said both mobile phones and broadband subscribers have immensely increased in Pakistan, adding that it showed market penetration of these services have increased.

Tarin says IT industry will grow by 100%

Tarin spoke about the IT industry, saying that they had registered a growth of 40% but by the next budget, he intended for it to grow by 100%.

"India, in 2010, earned $1bn through IT exports. Today, they are earning $100bn through them. If they can grow 100 times, can't we grow our IT industry by 40 or 50 times?" he asked.

Speaking about the energy challenges, Tarin said Pakistan's economy was burdened due to the overcapacity in the power sector, saying that "it was a very big challenge and a black hole" for Pakistan.

"We have to continue to make capacity payments as a result," he said, adding that even if Pakistan continued to grow at 4,5 or 6% in the next couple of years, the extent to which Pakistan had overbuilt, it is not possible for the country to utilise that capacity.

Tarin said the government will not resort to increasing tariff time and again, saying that it will have a cascading effect on inflation. "Indirectly, even the poor will be burdened with inflation over it," he said, adding that the government will take 7-8 years to eliminate circular debt.