ISLAMABAD, (APP):Federal Minister for Finance and Revenue, Dr. Abdul Hafeez Shaikh Monday emphasized that the government was firmly committed to correcting the fundamentals of the economy through effective policy making and targeted reforms with the objective to achieve sustainable and inclusive economic growth in the long run.
The minister was speaking at a Webinar titled “Making Pakistan Prosper: Strategy for Economic Growth and Development” organized by the Institute of Policy Reforms.
He said, that despite COVID-19 pandemic various economic indicators have shown progress during the current fiscal year (2020-21).
“Despite COVID-19, Pakistan registered a primary surplus during first quarter of FY2020-21 which is a great achievement. Similarly, Pakistan witnessed an upward trend in remittances, FDI and exports. The Large Scale Manufacturing (LSM) grew by 6.7%,” he addressed a webinar.
In his online remarks, the Finance Minister stated that the global economy was passing through an unprecedented crisis, adding that according to the IMF, there will be 4.4% contraction in global economy due to COVID-19 pandemic.
Resurgence of COVID-19 cases in Pakistan and worldwide have posed new challenges, he added.
The minister observed that the current government faced multiple fiscal, external and real sector challenges when it came into power in FY2018.
As a result, the present government had to impose strict financial discipline, curtail excessive government expenditure, increase revenue collection, introduce market driven exchange rate, remove large tax exemptions and discourage imports to put the economy back on track.
Consequently, Pakistan witnessed remarkable improvement in fiscal and current account deficits.
Tax Collection increased by 17%. Pakistan had successfully met performance criteria and benchmarks by International Monetary Fund (IMF) during the first review in pre-COVID-19 period.
The Finance Minister underscored the negative impact of COVID-19 pandemic and highlighted measures taken by the government to mitigate sufferings of vulnerable groups.
During COVID-19, government of Pakistan introduced “Smart Lockdown” which allowed many businesses to re-open or continue operations on limited scale to lessen the adverse economic impact during testing times. The Smart Lockdown approach by the government was acknowledged worldwide.
He said, the Government had given unprecedented fiscal, monetary and construction stimulus to stimulate economic recovery amid COVID-19 and in post-COVID-19 scenario.
An amount of Rs.1240 billion was allocated to cover emergency response, support businesses and provide relief to citizens during the crisis.
Similarly, a special package was announced to boost the construction sector which includes tax exemptions and subsidies to reinforce economic growth. Fifteen million families received direct cash payments under EHSAAS program, the Finance Minister stated.