It's nothing unusual for a succeeding government to blame its predecessor for all of the problems. As a result, the Pakistan Muslim League(N) administration accused the Pakistan Tehreek-e-Insaf (PTI) government. Massive economic damage is not uncommon. Both parties are attempting to make the most of the situation, while the general population, who has no interest in either story, is suffering.
The country is searching for solutions, not justifications or myths.
To find out the truth, people often read or listen to the opinions of impartial experts. We have one in this scenario. The Pakistan Economic Survey 2021-22, written by a team of 20 experts, you can use it to investigate the truth.
On June 9, 2022, with a foreword by the current Federal Finance Minister. Miftah Ismail, and the signature of the Economic Adviser to the Government of Pakistan.
The following are the key findings from the FY 2021-22 survey:
- 5.97 percent growth in real GDP
- Gross Domestic Product (GDP): Rs 66,950 billion (vs Rs 55,796 billion in 2021)
- Rs 8,992 billion in gross fixed capital formation (vs Rs 7,217 billion in 2021)
- 7.19 percent industrial growth
– Mining and Large-Scale Manufacturing (LSM) growth: 10.4 percent (vs 4.2 percent in 2021)
- 6.19 percent for services
- Agriculture grew at a rate of 4.4 percent (vs 3.48 percent in 2021)
- Income per capita: $ 1798 (vs. $ 1676 in 2021)
- 11.3 percent inflation (vs 8.8 percent in 2021)
- 17.7% increase in total revenue (vs 6.5 percent in 2021)
— Exports increased by 27.6%, totaling $ 26.8 billion.
Better work in the agriculture industry
The rise in LSM, Services and Agriculture is particularly positive. These are the sectors that produce jobs, generate revenue, and ensure food security. High yields, appealing output prices, supporting government policies. Better availability of seeds and pesticides, and accessible agriculture credits are the main factors for a positive agricultural year. The expansion of LSM, on the other hand, is to expand global demand, easy borrowing, and subsidized energy supply.
Overall, the main performance indicators show a pattern of progress and growth in recent years. The state economy, on the other hand, is confronting major issues, including a fiscal imbalance and growing debt. Despite a large increase in tax revenue, the budget deficit widened to 3.8 percent of GDP in FY 2022 (July to March 2022). Compared to 3 percent in 2021, due to greater current and development expenditure. The debt situation is equally alarming, as follows:
· Rs 44,366 billion in public debt
· Rs 28,076 billion in domestic debt
· External Debt: USD 88.8 billion
The economy got worse due to the Russia-Ukraine conflict
In an already tight budgetary situation. The PTI government's energy subsidies represent a substantial risk to fiscal sustainability. The economy's weakness, which had existed during the previous administration. Became even worse as a result of the Russia-Ukraine conflict.
In March 2022, the world's economies began to feel the effects of the Russian-Ukraine conflict. The main source of shock was the availability and price of oil, gas, and commodities, with Russia being one of the major suppliers of all three. Economies all around the world fought to protect their supplies from alternative sources, which came at a high cost.
Pakistan's freshly installed government was in the crossfire, and it took them far too long to understand and respond to the situation. As oil prices rose, LNG deliveries to Pakistan transferred to wealthy countries willing to pay whatever it took.
The administration did not investigate the potential to purchase oil and gas from Russia at a reduced price for reasons that were not made public. India, Sri Lanka, and many other countries took advantage of the situation.
The economic crisis in the world
The entire world is in an economic crisis. With energy shortages, inflation, commodity, and logistics disruptions. After decades of growing inflation, the people of the United States are feeling the pinch.
The current administration must emerge from the shadow of the previous administration's actions. And begin working on answers that have so far been lacking.
The administration appears to be focusing all of its efforts on negotiating a settlement with the IMF. This is one of the most pressing issues, but many others must be handled as well. The market isn't in good condition and perplexing, the rupee is losing value. Market transactions and cash flows are modest. Even remittances from Pakistanis living abroad have decreased.
The government's national budget is more of a political and election-oriented document. Then a solution-oriented plan to get the country out of its current economic quagmire.
The IMF has objected, and the economic team anticipated that they would. Retailers and importers have received tax breaks, while IT exports, which had just begun to build up, have hit a levy. Employees in the government have received a 15% raise in pay. But earnings in the private sector have been cut due to growing business stagnation.
To get the country out of its current political and economic challenges. All stakeholders must take a more serious and meaningful approach - something that has eluded them thus far.