Economic Survey to be released on Thursday
ISLAMABAD: The federal government will release the Economic Survey 2019-20 on Thursday, one day before the presentation of the federal budget for the next fiscal year.
The Economic Survey provides data about the national economy and its performance during the year. However, this year the data is not expected to be encouraging, as the government appears to be missing out on almost all the major targets it set for the outgoing year.
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The Economic Survey will state that the growth of the industrial sector remained -2.6%. The agricultural sector grew by only 2.7% against the target of 3.5, mainly because of a decline in the production of all major crops.
In addition, the target for the industrial sector growth was set at 2.3% for the current financial year, but it showed a -2.6% growth on the back of a whopping -7.8% growth in the large industrial units. Similarly, the minerals sector also posted -8.8 growth against the target of 2.0%. The target for the services sector was set at 4.8% in the last budget but during the year, the growth rate was recorded at -0.6%
On the other hand, the distribution and production of electricity and gas exceeded the target. Its growth rate target was 1.5% but it grew by 17.7%. The construction sector also fared better in the outgoing year.
Budget 2020-21
The federal budget will be unveiled in the National Assembly on Friday and the post-budget press conference will be held on June 13. At the press conference on Saturday, Finance Adviser Hafeez Sheikh along with his team will brief the media about the budget.
According to a planning commission working paper, seen by Reuters, the budget will target 2.3% growth in the gross domestic product (GDP), with contributions from agriculture (2.9%), industry (0.1%), and services (2.8%). The total spending is projected at Rs7.6 trillion and a fiscal deficit of 6.9% of GDP.
That forecast is much rosier than the 0.2% contraction in 2020-21 projected by the World Bank earlier in June. The multilateral lender sees the growth of -2.6% this fiscal year, ending June 30, while the government expects a 0.4% contraction. The National Economic Council (NEC) will review the estimates ahead of Friday’s budget and can make changes.
Hit hard by the coronavirus and with about $10 billion in debt service costs in the coming financial year, Pakistan needs funds to stave off a balance of payments crisis, officials from the finance and economic affairs division told Reuters. “We have plans to mobilize around $14 billion in inflows,” a high-ranking official said.
That includes $6 billion from multilateral banks, $2 billion from last year’s IMF bailout package, $3 billion in Chinese commercial loan rollovers, $1.5 billion from Eurobonds, and the rest in bilateral aid and Saudi oil repayment facilitation. The International Monetary Fund money is subject to a successful review, he said.