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The country’s economy has rebounded strongly in FY-2021 posting a growth of 3.94 percent, which is not only substantially higher than the previous two years (-0.47 and 2.08 percent in FY-2020 & FY-2019, respectively) but also surpassed the target (2.1 percent for FY-2021). Despite strict fiscal constraints, timely and appropriate policy measures taken by the government resulted in a V-Shaped economic recovery.
At the start of 2021, amid worldwide vaccination campaigns, the global economy began to show healthy signs of recovery. However, the third wave of the pandemic adversely impacted the pace of economic recovery by slowing it down. The pandemic, which had already induced shocks like lockdowns, border closures, the collapse of trade, travel bans, gave yet another blow to the world economy by affecting the global supply chains.
For the Pakistani economy also, the pandemic became a severe challenge as the country was already under the pressure of stabilization required to address the Balance of Payments crisis that emerged in FY2018. Thus, both consecutive adverse shocks, stabilization pressure owing to the Balance of Payments crisis and COVID-19 pandemic, put the economy far below its potential level, which resulted in negative growth in FY-2020.
However, GDP growth of 3.94 percent in FY-2021 is a V-shaped economic recovery which shows concerted efforts of the government for addressing structural issues to avoid further macroeconomic imbalances. The government also took some immediate requisite measures for sustainable and robust growth along with protecting the most vulnerable segments of the society.
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The country’s economy has rebounded strongly in FY-2021 posting a growth of 3.94 percent, which is not only substantially higher than the previous two years (-0.47 and 2.08 percent in FY-2020 & FY-2019, respectively) but also surpassed the target (2.1 percent for FY-2021). Despite strict fiscal constraints, timely and appropriate policy measures taken by the government resulted in a V-Shaped economic recovery.
At the start of 2021, amid worldwide vaccination campaigns, the global economy began to show healthy signs of recovery. However, the third wave of the pandemic adversely impacted the pace of economic recovery by slowing it down. The pandemic, which had already induced shocks like lockdowns, border closures, the collapse of trade, travel bans, gave yet another blow to the world economy by affecting the global supply chains.
For the Pakistani economy also, the pandemic became a severe challenge as the country was already under the pressure of stabilization required to address the Balance of Payments crisis that emerged in FY2018. Thus, both consecutive adverse shocks, stabilization pressure owing to the Balance of Payments crisis and COVID-19 pandemic, put the economy far below its potential level, which resulted in negative growth in FY-2020.
However, GDP growth of 3.94 percent in FY-2021 is a V-shaped economic recovery which shows concerted efforts of the government for addressing structural issues to avoid further macroeconomic imbalances. The government also took some immediate requisite measures for sustainable and robust growth along with protecting the most vulnerable segments of the society.
Read full story...
