Pakistan's economy not shrinking, asserts govt

ISLAMABAD: The Finance Division on Friday described as “incorrect” the impression created by a section of the media that Pakistan’s economy is shrinking.

In a statement, the Finance Division asserted that the macroeconomic adjustment policies introduced by the government to support balance of payment and strengthen market confidence will lead to higher and inclusive growth.

“The contention of a section of the media talking about shrinking economy seems incorrect as the early signs of recovery of economic activities in fiscal year 2020 are very much encouraging,” it said.

On agriculture front, the government is implementing “National Agriculture Emergency Programme” and has approved 8 mega projects at a cost of Rs235 billion.

This will encourage economic activities in rural areas and create employment opportunities in the country.

Credit to the agriculture sector has increased by 20.7 per cent, the sowing of cotton crop has also increased by 14.4 per cent as compared to last year which will increase cotton crop in double-digit.

The import of agriculture machinery has recorded a growth of 8.7 during FY2019 which is a good indicator. The base effect will also support growth in agriculture.

Earlier estimates of cotton crops suggest that cotton production will increase at least by 3 million bales in FY2020 from last year. All these developments forecast agriculture is likely to rebound and grow more than 3.0 percent in CFY.

For inclusive growth and to protect the vulnerable segments of society, various social protection programs (through a newly created poverty alleviation division) have been introduced.

Under Poverty Alleviation, the government has allocated an additional amount of Rs80 billion in the country’s social protection spending for 2019-20 which cumulatively reached Rs 190 billion which will also have a spillover effect on the private sector activities.

Tax collection during the first quarter of the current fiscal year has so far been 16 per cent higher than the tax collection of the same period last year.