ISLAMABAD: Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar Thursday formally launched the ‘Pakistan Economic Survey 2022-23’, the pre-budget document which shared key economic indicators and the performance of different economic sectors during the outgoing fiscal year.
The launching ceremony among others was attended by Federal Minister for Planning, Development and Special Initiatives Professor Ahsan Iqbal, Minister of State for Finance Dr Aisha Ghaus Pasha and senior officers.
The survey revealed that the government’s performance fell far short of expectations, with the GDP growth rate plummeting to 0.3%. The finance minister presented the pre-budget document, which analysts would scrutinize for any signs of populist giveaways and indications of the government’s commitment to economic discipline required for another IMF program.
Dar reflected on the state of the economy when the Pakistan Muslim League-Nawaz (PML-N) government took office in 2013. He highlighted the challenges they faced, such as a crumbling economy, frequent power outages, and increasing terrorism. The government implemented a strategy based on three ‘e’s—exports, equity, and empowerment—and witnessed macroeconomic growth. Now, the focus is on five driving areas: exports, equity, empowerment, environment, and energy, forming the roadmap for the upcoming year.
The finance minister acknowledged that the current year had been challenging, but the government made efforts to handle the economic situation. Information technology was added as a standalone section in the economic survey, with the sector expected to contribute to future growth. The government aims to achieve macroeconomic stability, inclusivity, and resilience, ensuring equitable distribution of resources to restore investor confidence.
Dar recalled merging all stock exchanges in 2013, leading to substantial growth in the stock market’s capitalization. He stated that when the PML-N government assumed power in 2022, they faced severe challenges such as a shrinking fiscal space, rising inflation, a skyrocketing current account deficit, and increasing financing needs. The finance minister defended the government’s actions, highlighting the reduction in foreign exchange reserves before their tenure and emphasizing that they managed to stabilize the economy and move towards stability.
Drawing a comparison between 2018 and 2022, Dar mentioned the increase in fiscal deficit, trade deficit, current account deficit, and public debt. While tax collection had increased, a significant portion went towards debt servicing. The finance minister admitted that the increase in debt and policy rates had reached unsustainable levels, impacting Pakistan’s credibility. He emphasized the importance of honoring sovereign commitments and expressed disappointment over backtracking on promises.
Dar acknowledged the global economic turmoil affecting Pakistan, including trade and finances. He also mentioned the impact of unprecedented floods, which resulted in substantial physical and economic losses. However, he expressed gratitude for the support received from donor conferences, highlighting the planning minister’s efforts.
Regarding the IMF program, Dar noted that it should have been completed in 2022. He defended the government’s economic stability efforts, acknowledging the political cost and highlighting the importance of restoring Pakistan’s credibility. He expressed hope for timely payments and emphasized that Pakistan had met all its debt obligations.
The finance minister discussed the prioritization of food and medicine imports during the outgoing year. He mentioned the challenges posed by rupee depreciation, which increases inflation and hampers export growth. Dar suggested that the dollar’s real value against the rupee was less than 200 and proposed the possibility of a significant reduction in the dollar price.
Overall, the finance minister presented an overview of Pakistan’s economic performance, highlighting the challenges faced and outlining the government’s strategies and goals for the upcoming year.