ISLAMABAD: Pakistan’s economy is all set to move towards a robust recovery shown by the macro-economic indicators paving the way for sustained progress and development in the country for the next fiscal year, says the Ministry of Finance’s Economic Update and Outlook for April, released on Tuesday.
According to the report, both the fiscal and external sectors have proved resilience whereas the real estate sector and agriculture emerged as the key driving forces of the economic growth in the current fiscal year, witnessing the growth of 8.6 and 5.0 percent in the first and second quarters of the financial year 2024, respectively.
The report further stated that the robust economy also displayed optimistic signs to bring the inflation downward, while the growth in the 1st and 2nd quarter of the ongoing financial year has been predicted at 2.5 percent and 1.0 percent respectively.
Report Shows Improvement in Show Agriculture
The agriculture sector showed a positive recovery due to the government’s initiatives through improved input supply and enhanced credit disbursement to farmers, coupled with an increase in farm tractor production and sales went up by 59.7 and 65.8 percent, respectively.
Meanwhile, a boost of 33.6 percent was registered in agricultural credit disbursement during the first 08 months of the current financial year, along with an increase in the production of major crops including doubled cotton production, 34.8 percent increase in rice production whereas maize production went up by 5.6 percent.
However, the report further revealed that Large Scale Manufacturing (LSM) witnessed a marginal fall of 0.5 percent during the first 08 months of the current financial year.
The report stated that 11 out of 22 sectors witnessed positive growth during the under-review period.
Tax Collection
According to the report, the net federal revenues recorded a substantial growth of 51 percent on the back of significant growth whereas tax collection went up by 30 percent, surpassing monthly as well as 9-month targets.
However, total expenditures remained under pressure due to higher markup payments (multilateral and bilateral) marginally increasing the fiscal deficit to 3.0 percent of GDP against 2.8 percent last year.
In addition, the current account posted a deficit of $ 0.5 billion for Jul-Mar FY2024, having a significant reduction of $4.1 billion last year. The improvement is reflective of a sizable reduction in the trade deficit.
Increase in Remittances
The remittances witnessed a remarkable year-on-year (Y-o-Y) growth of 16.4 percent in March 2024 being witnessed at $3.0 billion against $2.5 billion in the month of March 2023. On month-on-month (m-o-m) remittances increased substantially by 31.3 percent against $ 2.3 billion in February 2024.
Foreign Direct Investment
The Foreign Direct Investment (FDI) inflows recorded a surge of 89.4 percent to $ 258 million as compared to $ 136.3 million last month. The improvement in FDI inflows is attributed to improvements in the investment environment and a reduction in recent uncertain situations.
