Already reeling under the pressure of FATF restrictions, the national economy has been shaken by the Covid-19 pandemic. More than a hundred million people across the world have been infected and more than a million have died due to the deadly virus. The World Bank and the International Monetary Fund have projected a substantial contraction in the global economy. In Pakistan, the impact has been relatively less severe. Nevertheless, we saw a negative GDP growth for the first time in living memory.

As we review some of the most vital economic sectors, it is clear that both policymakers and businessmen face uncertain times ahead. During the last two years, the KSE-100 index has witnessed several positive developments that helped its benchmark index reach the 42,000 level. It also saw losing streaks following negative developments including those related to Covid-19 and Financial Action Task Force that dragged the index down to 27,000 level. When the current government came to power in 2018, the index had stood at 42,446 points, with a market capitalisation of around Rs 8.703 trillion. There was a large current account deficit, the rupee was losing value against major currencies and the exports were declining amid tough competition and wayward policies. The index reflected the difficulties and lost ground. However, the situation has started to ease at least for the financial markets.

The banking sector’s performance has been satisfactory over the first 11 months of 2020. According to State Bank of Pakistan’s Mid-Year Performance Review (MPR) of the Banking Sector for the year 2020, the performance of the banking companies for the period January to June 2020 was satisfactory. The country’s energy sector has also remained fragile due to inefficient energy distribution system.

The agriculture sector has always been a major contributor to the national economy in Pakistan. According to official data, it has contributed 18.9 percent, since 2010, to the GDP (gross domestic product) down from about 40 percent in early ’60s. It provides livelihood to 42.3 percent of the labour force. While agriculture has traditionally been called the backbone of Pakistan’s economic growth, agriculturists say the sector is facing tremendous problems. During 2017-18, agriculture sector recorded a remarkable growth of 3.81 percent (lower than 4.4 percent in the ‘90s). Given the high population growth rate, this is indeed not great. Poverty remains high in the agriculture sector and is currently close to 30 percent. Food security is consequently becoming a major issue for a population of more than 212 million people.