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June 14, 2019

Finance, planning ministries differ on macroeconomic projections


June 14, 2019

ISLAMABAD: The Ministries of Finance and Planning publicly differed on macroeconomic projections as both published different projections of GDP growth rate and inflation target for the budget 2019-20 under the dispensation of the PTI-led regime, it is learnt.

Completely bypassing the Ministry of Planning, the government first time in the country’s history published altogether different numbers of macroeconomic framework through the budget document for 2019-20 despite approval of the National Economic Council (NEC) for higher growth projections.

The annual plan for 2019-20 prepared by the Planning Commission and an official summary approved by the highest economic decision-making constitutional body of the country, NEC, under chairmanship of Prime Minister Imran Khan approved real GDP growth rate of 4 percent and inflation at 8.5 percent just ahead of the budget announcement for next fiscal year 2019-20.

However, the Ministry of Finance has completely bypassed and ignored the macroeconomic framework approved by the NEC and published through the Budget Brief 2019-20 showing that the country’s GDP growth is projected at 2.4 percent and inflation at 11-13 percent for next fiscal year.

The Finance Ministry further showed that the GDP growth rate would grow at level of 3 percent in 2020-21 and inflation would be touching 8.3 percent. It further projected that GDP growth will touch 4.5 percent by 2021-22 while inflation will start coming down and touch at 6 percent.

The Ministry of Finance has portrayed a horrifying picture about the national economy indicating that the country was heading towards stagflation with low growth and higher inflationary pressure for next three years under the IMF programme.

Renowned economist Dr Hafeez A Pasha had already projected that millions of people would fall into trap of poverty over the next three years. The Ministry of Finance and IMF always differed on macroeconomic projections but the Fund never forced Pakistani authorities to endorse the Fund’s projection through official documents. It’s first time that the Finance Ministry projected dismal picture of macroeconomic framework for three years where there was no hope left for the masses to come out from the difficult situation under the IMF programme. The macroeconomic framework is the domain of the Ministry of Planning under the rules of the business and National Economic Council (NEC) approves macroeconomic framework.

Sources said that the Planning Ministry might take up this issue with the Finance Ministry but so far nothing concrete in shape of official communication has been done so far to highlight this issue.

This correspondent made several efforts to get official version of the Finance Ministry but could not get any response.

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