In the live call session on Sunday, Hammad Azhar said, “In 2018, Pakistan was on the verge of default but today’s Pakistan, even after the outbreak of Covid-19, was moving ahead on the path of growth and progress in a much better way and was much ahead of growth forecast.”
The incumbent Finance Minister said that despite the enormous challenges the current government is facing, the economy is doing much better than during the previous government’s regime.
He said, “No doubt there’re challenges, but let me assure you there’s a huge difference between today’s Pakistan and Pakistan before 2018”.
He was of the view that before 2018, all the indicators pointed out that the economy was actually quite worse, but the mass public wasn’t made aware because it would have a negative impact.
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The country’s foreign reserves according to SBP stood at $7.502 billion by November 2018, which had been falling since 2017. However, in December 2020, PM Khan announced that the reserves were at 3-year highest at $13 billion.
According to him, the foreign exchange reserves had almost finished and the existing around the US $7 to $8 billion, which were in State Bank, were reserves on the basis of short-term loans, which had to be paid back in two to three months.
Then later in 2018, Imran Khan’s government decided to increase interest rates (to attract investors) and devalue the currency.
“Afterwards these decisions started giving results and the historic current account deficit, which the government inherited, turned into surplus after 17 years,” Finance Minister added.
He then, went on to talk about the impact of Covid-19 on the world economy, where the countries’ economies shrunk by five to ten percent compared to 0.4 percent in the case of Pakistan.
He said that the government had introduced a timely package during the pandemic, including, waiving off electricity bills for three million businesses, whereas 170 million families were granted immediate relief via Ehsaas Programme.
In World Bank’s recent forecast for Pakistan released on 31st March 2021, projected the country’s GDP growth at 1.3 percent for the current fiscal year of 2020/21 with the economy severely affected by coronavirus lockdown that leads to an increase in poverty.
The world bank stated, “Risks to the outlook include new waves of COVID-19 infections and delays in the implementation of critical structural reforms.”
This forecast is contradictory to the government’s own projection of 2.1 percent GDP growth and SBP’s 3 percent GDP growth rate projections.
Hammad Azhar said, despite Covid-19, the Large-Scale Manufacturing (LSM) was growing at eight percent whereas automobile and cement witnessed historic sales. Urea fertilizer sales broke 10 years record whereas there were also record tractor sales.
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He said that around 100 textile mills that were shut down during the previous government’s regime were revived whereas thousands of power looms that were closed in Faisalabad were also restored to full functioning.