The Ministry of Finance on Wednesday anticipated a surge in economic activities despite the uncertain pandemic situation but warned that transition to higher growth could build pressure on external accounts.
“In the transition towards a higher potential growth level, pressure can be built on external accounts,” the economic adviser’s wing of the finance ministry said in its Monthly Economic Outlook (MEO) for July, calling for close monitoring to ensure that the new growth strategy is sustainable without any macroeconomic imbalances as observed in the past.
The report said the objective of recent accommodative monetary and fiscal policies was to put Pakistan’s economy on a higher growth trajectory and the economic recovery in Pakistan’s main exporting partners was making the external environment favorable. However, recent deadly floods in Germany, China, India, and North America may raise direct and indirect economic losses along the global supply and trade chains.
It said the surge in economic growth was expected to continue in FY22 on account of reopening of economic activities and acceleration in the vaccination process. The risk of pandemic still exists, however, the government may not follow complete lockdown given the public behaves responsibly by following the Covid-related SOPs.