Economic survey

The story of economic slowdown in the country has been confirmed by the Economic Survey of Pakistan for 2018-19, which was released a day before the budget. The number that made the most news is that the growth rate merely hit 3.3 percent against a target of 6.2 percent. While one could be sure that even under the previous government the economy was likely going to miss the growth target, most would have thought it would be a close shave. In dollar terms, Pakistan’s GDP has massively shrunk in the last fiscal year. And what continues to be the biggest worry is that the current government has made a habit out of blaming those before it, instead of focusing on its own performance. Finance Adviser Dr Hafeez Sheikh too has blamed the last 10 years of ‘economic mismanagement.’ The limits of such a blame game aside, one must wonder: why go back only a decade?

It is a simple enough answer, given that most of the current economic team was calling the shots before this time. All the talk of potential is fairly redundant when the government’s own policies are designed to shrink the economy in real terms. According to the economic survey, all real economic sectors, including agriculture, industry and services, declined over the last fiscal year. Fifteen out of 20 sub-sectors missed growth targets, while six shrunk. The finance adviser blamed the past government for the Rs3 trillion required for interest payments next year, but around one-fourth of that burden has been added in the current fiscal year. The economic survey itself shows that total debt and liabilities have increased by around 18 percent since June 2018. Debt is certainly a threat to the economy, but it would not be unfair to wonder if reducing real economic activity will make things better. There is little to assure the public that next year will be any different.

While the finance adviser has questioned the targets, since they were set by the previous government, it is worth bearing in mind that the PTI has set growth targets in most economic sectors that do not correspond with the lack of incentives contained for the same sectors in the budget. Agriculture only grew by 0.8 percent, industry by 1.4 percent, while large-scale manufacturing shrunk by 2 percent last year. Foreign investment actually shrunk by 50 percent, while exports showed zero-growth. There is little to show to prove that there has been a positive impact of the government’s policies to address the economic situation. One would hope that next year the excuses will stop and the motley crew of economic advisers assembled by the government will talk about their own performance, rather than of those before them.