The minister of finance Mr. Shoukat Tareen has presented the Economic Survey of Pakistan for year 2020 – 2021 at a press conference in islamabad. The finance minister said that Pakistan economy has started to recover last year the governemnt had said that economic grouwth will be 2.1 however large scale manufecturing has shown a growth of 9 percent and the current account is showing a surplus as of now.
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Pakistan will end this fiscal year with a surprise growth figure of 3.9%, beating several earlier projections that fell in the range of 1-2%. The V-shaped recovery, Tarin said, comes on the back of several fiscal and monetary measures that were introduced during the outgoing fiscal year.
“Smart lockdowns was a great idea,” said Tarin, who replaced Hammad Azhar, as the country’s finance minister earlier this year. “Several countries did not follow the same policies, and suffered.”
Addressing the topic of inflation, Tarin said Pakistan has become a net food importer, and is now dependent on international prices of commodities.
“The country is now importing wheat, sugar, palm oil among others.”
Pakistan recorded inflation of 8.8% during July-May of the outgoing fiscal year as food prices remained a major issue for the country. With the pandemic and closure of several businesses, many were plunged into poverty.
However, he credited remittances, and the recovery of the manufacturing sector as Pakistan registered a V-shaped recovery.
“We did not pass on the impact of rising crude oil prices to the consumers,” said Tarin as he addressed reporters in Islamabad.
The finance minister, the current government’s fourth in less than three years, also said focus will remain on growth as the economy is steered towards stabilisation. The ex-banker also highlighted the role of Pakistan’s IT sector, saying that it will be promoted in the coming fiscal year.
“The IT sector is growing by 40%. We want to see growth of 100% in the coming year. Our focus is on increasing exports, and we will give several incentives, as you will see in the budget (on Friday).”
To a question, Tarin said countries usually increase their tax revenue by focusing on indirect taxation first. However, as Pakistan moves forward, focus will be on consumption and income tax.
“Usually, developed countries focus on indirect taxation first. As Pakistan adopts more technological-savvy measures, direct taxation will increase as well,” said Tarin, referring to policymakers’ inclination to focus on withholding taxes, and indirect taxation to increase revenue.
“The tax authority will be reformed.”
