Economic growth of Pakistan.

Byline: S. KAMAL HAYDER KAZMI

Analysis of economic survey of Pakistan FY 2021 showed that the economy of Pakistan rebounded strongly in FY2021 and recorded growth of 3.94 percent which is not only substantially higher than the previous two years (-0.47 and 2.08 percent in FY2020 and FY2019 respectively) but also surpassed the target (2.1 percent for FY2021). Despite strict fiscal constraints, the economists of Pakistan also recorded that timely and appropriate policy initiatives taken through the government resulted in a V-Shaped economic recovery. Start of 2021, amid worldwide vaccination campaigns, the global economy started showing healthy signs of recovery, however, third wave of the pandemic tempered the pace of economic recovery.

The pandemic which already induced shocks like lockdowns, border closures, collapse of trade, travel bans and financial market volatility globally. It is also said that projecting difference in recovery on the basis of divergent circumstances of each country and the idiosyncrasies of its policy response. It was stated that success in the post-pandemic era will reflect a constellation of strategies and capacities peculiar to each country, counting national vaccination rates, integration into major economic blocks, the ability to provide fiscal and monetary stimulus and the restoration of solvency in the private sector. For Pakistani economy, this pandemic also became a severe problem as country was already under the pressure of stabilization required to address Balance of Payments crisis emerged in FY2018. Thus, both consecutive adverse shocks; stabilization pressure owing to Balance of Payments (BoP) crisis and Covid-19 pandemic put the economy far below its potential level which resulted in a negative growth in FY2020. First wave of pandemic started in April 2020, depressed majority of economic activities. Beginning of new fiscal year was better in term of containment of pandemic and economic recovery, however second wave in late October 2020 and third wave in March 2021 made government of Pakistan attempts more challenging for containing the pandemic and keeping the economic activities to continue.

Statistics showed that the real GDP growth of 3.94 percent in FY2021 is V-shaped economic recovery which shows concerted efforts of government for addressing structural issues to avoid further macroeconomic imbalances. No doubt, the government also took some immediately requisite measures for sustainable and...