Financial Year 2020-2021’s initial estimates of growth have come as a pleasant surprise to many, including perhaps the top economic minds of the government. Posting 3.94 growth percent across all sectors, this goes above even the most optimistic target—set by the State Bank at 3 percent. International organisations such as the IMF and the World Bank had instead made much more modest predictions; IMF had estimated 2 percent growth while WB had anticipated no more than 1.5 percent.
It is clear then, that the government’s early optimism was well founded. The biggest stumbling block to growth in the past year has been the Covid-19 pandemic and the resulting slowdown and stop-start economic activity. This would have theoretically affected the services sector the most, but the growth of 4.4 percent for tertiary activity instead suggests that this sector was doing all the heavy lifting in keeping the economy afloat.
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Industrial output also saw overall growth at 3.57 percent, but a big disappointment and potential problem in the next year is the agricultural sector, with only 2.77 percent growth in the year. This is something that the government must look to increase over the remainder of its term.
With these figures, even with the coronavirus pandemic ravaging businesses, the government can take a moment to pat itself on the back. The PTI government’s most major criticism has been the state of the economy, and with this number, it can legitimately claim that it is slowly bringing the country back on track.
The next two years of the government are crucial in both determining the impact PTI’s rule has had at the federal level, alongside setting the trajectory of the economy for the next five years. The challenges are still immense. Agricultural produce is affected on a yearly basis, and there is an urgent need to diversify, alongside heavily investing in the technology sector in order to catch up with global trends. There is also the government’s own prioritisation of sectors such as tourism and construction; it must continue to strengthen these to leave a lasting impact and put itself in a good position for the polls at the end of the term. The Prime Minister and his cabinet can enjoy this deserved moment, but there is no room to rest on our laurels as the government well understands.
Source: https://nation.com.pk/23-May-2021/significant-growth