Everyone from developed countries to developing nations have been affected. Let's find out how much the Pakistani economy has been affected in one year and what other factors besides Corona have had on the economic condition of Pakistan.
It would not be wrong to say that the Pakistani economy is dependent on the fluctuations of the dollar. But the dollar is not the only measure of economic growth and decline. Apart from this, there are other factors that play an important role in determining the economic direction. Today we will look at most aspects. Let's take a look at the dollar first.
On January 1, 2020, the value of the dollar in Pakistan was about 154 rupees and in December 2020, its value is around 160 rupees. But in that one year, the value of the dollar had reached close to 170.
The reason for the random fluctuations in the value of the dollar is the agreement reached with the IMF. Accordingly, the SBP will not control the dollar and the market will determine the price on the basis of supply and demand. But the ups and downs seen in a year are few and far between. In the past, the value of the dollar has risen sharply, but has not fallen by about 12 rupees.
When the value of the dollar reached Rs 108 in 2014, Sheikh Rashid had claimed that the government could not bring the value of the dollar to Rs 100, but then-Finance Minister Ishaq Dar denied the alleged aid of ڈی 1.5 billion from Saudi Arabia. By using it, they managed to bring the value of the dollar to Rs. 97.
But it was an artificial method while the current decline has been under the rules of the market. Legislation enacted by the government to increase dollar reserves has strengthened the value of the rupee in the country.
Pakistan's federal government has set a GDP target of more than 2% for the current fiscal year, down from minus 0.4% last fiscal year.
The International Monetary Fund (IMF) expects Pakistan's GDP to grow by one percent in the current fiscal year, while the World Bank predicts a negative one percent of the country's GDP.
Following the negative trends in the economy caused by the corona virus in the country, the government is now claiming that the country's economy is beginning to show signs of recovery and that the economic recovery is improving GDP. Is coming
On the other hand, the government in Pakistan has been targeted by the opposition for the negative GDP in the last financial year.
Is Pakistan's economy really improving?
Journalist Shahbaz Rana is an economist in Islamabad. He said that efforts were being made to reduce the current account deficit in Pakistan for a long time but it was too early to say that there would be any significant change in the economic condition of the country. He told DW, "There is a glimmer of hope, but it will be too early to give a final opinion." Shahbaz Rana says the government is giving positive signals, but also To say that
If the corona virus outbreak increases on Eid al-Adha, the risk of a decline in the growth rate will increase.
Referring to the increase in foreign investment in the country, Shahbaz Rana said that in the financial year 2020, the government has received license fees for telecom companies in Pakistan, which has led to an increase in 'foreign direct investment' or FDI. This is not a long-term increase.
What options does the government have?
Dr. Ashfaq Ahmed, Dean, Business School, National University of Management and Sciences, says that the current account deficit in Pakistan was بیس 20 billion in fiscal year 2018, now it is only ارب 3 billion. Pakistan's foreign exchange reserves have also increased, but the policies under which the current account deficit has been reduced have hurt the country's economy.
Regarding the increase in remittances, Dr. Ashfaq Ahmed says that the increase is due to the Corona epidemic which has led to the dismissal of many Pakistanis in the Middle East and the loss of their savings. Sent to Pakistan. However, Dr Ashfaq Ahmed said the government could not be blamed at the moment because it had few options. Economies around the world are shrinking and Pakistan is a part of this world. They said
"Pakistan's exports will increase only when the economies of other countries in the world improve. It doesn't look like there will be a big positive change in fiscal year 2021. In fiscal year 2021, Pakistan's economy is expected to grow at more than 1 percent, but the population is growing at more than 2 percent, which means that the country's per capita income will be lower".