Fitch Solutions has projected Pakistan’s economy would grow by 4.2% in the current fiscal year 2021-22 (July-June), considering that the government and the private sector are determined to ramp up spending and overseas Pakistanis would maintain sending strong workers’ remittances during the year.
The growth would be supported by significant improvement in business confidence, accommodative monetary (low interest rate) and fiscal (high public spending) policies, reduced number of Covid-19 cases in the country, the government strategy to control the pandemic through smart lockdown instead of a nationwide one, increased drive to vaccinate the nation and subsidised loan for setting up new factories and expending the existing one through the central bank initiative of Temporary Economic Refinance Facility (TERF).
The growth projection by the global research firm is, however, notably low compared to the government set target for 4.8% in the current year. The gross domestic product (GDP) grew 3.9% in the previous fiscal year 2019-20.
The UK-based research firm added that imports would rebound strongly and outpace export growth.
Accordantly, “net exports will contribute negatively to headline (inflation) growth as import growth is set to outpace export growth”, Fitch Solutions said in a report titled ‘Pakistan Economic Recovery to Continue in FY2021-22’.
