Why Pakistan's economic growth rate will not be maintained in the next financial year?

In Pakistan, the Federal Government's Annual Plan Coordination Committee has set a growth target of 5% for the next financial year. In the current financial year, the economic growth rate is expected to be up to six percent. Earlier, Pakistan's Federal Ministry of Finance had warned that the country's overall economic growth would not grow at 6% in the next financial year. Pakistan's Ministry of Finance predicts that the country's economic growth will not grow at 6% in the next financial year, and the annual plan coordination committee's target of 5% came at a time when the country was about two months old. The government is going to present its first budget. The plan is targeted by the Coordination Committee at 5% and the Ministry of Finance predicts that the overall economic growth rate will not grow at the rate of 6% in the next financial year, according to data released by the government's National Accounts Committee. It said that in the current financial year, the economic growth rate or GDP growth rate will remain at six percent. The Ministry of Finance has attributed the slowdown in GDP growth to not being 6% in the next financial year due to inflation and depreciation of Pakistani Rupee against the dollar. The ministry said that although the country's economy is expected to grow at a rate of 6% in the current financial year, the growth could not be sustained next year due to financial pressures and the performance of the external sector. Economists in Pakistan have commented on the prediction that what has been said by the Ministry of Finance means that Pakistan's economy is 'overheated', meaning that it is growing beyond its capacity and capacity. Not sustainable.
According to him, this economy is one in which it consumes more than it produces and this consumption increases inflation and is dangerous for the economy. Although increasing the country's economic growth rate is necessary to create new jobs, this economic growth also creates problems for a country that relies on imports for energy and raw materials for industry. Minister of State for Finance, Dr. Ayesha Ghous Pasha, while commenting on the economic growth figures of the previous government, said that it was debt and consumption led growth which was not sustainable. On the other hand, Muzammil Aslam, spokesperson of Pakistan Tehreek-e-Insaf (PTI) for economic affairs, while commenting on this, said that due to the economic policies of the PTI government, the economic growth this year is due to the growth in agricultural and industrial sectors. This growth is based on production. He said the current government was worried that the economic growth rate would not be maintained at 6% in the next financial year because of high interest rates and inability to meet energy needs. Increase does not seem possible.
What is the basis of the Finance Ministry's forecast? A report released by the Federal Ministry of Finance said that due to the micro-economic imbalance in the country, it is difficult to achieve 6% economic growth next year. According to the finance ministry, the country is currently facing rising inflation, foreign trade deficit, falling value of the national currency, rapidly declining foreign exchange reserves and growing uncertainty. It should be noted that in the last year of the PML-N government which ended in 2118, the economic growth rate was more than 6%. In the second year of, the rate went down to negative. Last year, the growth was close to 4% and this year, the economic growth rate is expected to be 6%.
The reason for the slowdown in the country's economic growth? Explaining this, Shahid Mahmood, a research fellow at the Pakistan Institute of Development Economics and an expert on economic affairs, said that whenever the pace of economic growth of the country increases, the demand for energy increases. Growing and Pakistan relies on external sources for energy needs such as oil, gas and coal. When the demand for energy increases, the country's import bill will increase and external payments, which require dollars, will increase, and when the dollar is spent, it will put pressure on the country's foreign exchange. Will have effects. He said that Pakistan's economic structure is such that whenever GDP grows, the country's trade deficit will increase which will create an imbalance in payments. He said that in order to achieve sustainable GDP, it was necessary to change the economic structure. "The economy is overheated at the moment," Dr Amjad Rashid, an economics teacher at the Lahore School of Economics, told the BBC. He said it was expected to grow by 4% but accelerated to 6%, creating an imbalance in the microeconomics, which means that the fiscal deficit has widened and inflation has risen. Is. Explaining this, he said that when there was an imbalance in external payments, it had a negative impact on the value of rupee which made imports more expensive and increased inflation in the country. What is the position of PTI and Nawaz League on 6% GDP growth this year? Regarding the six per cent growth in the current financial year, Shahid Mehmood said that economists from both the PTI and Nawaz League are reluctant to talk about the fact that high GDP has created more problems for Pakistan. Appears in the form of imbalances in payments. In response to Minister of State for Finance Dr Ayesha Ghous Pasha, PTI Economic Affairs Spokesperson Muzammil Aslam said that first of all it is necessary to understand the structure of growth. He said that when the GDP growth was six per cent in the previous period of Nawaz League, then the current account deficit of the country became 19 19 billion whereas this year when the growth is six per cent, the deficit is ارب 14 billion. Will be. He said that the reason for this deficit is also the rising prices of commodities and oil in the world. Muzammil said that if these prices had not risen, the current account deficit would have been only ارب 5 billion with this high growth, due to the strong production figures behind the GDP growth. Economist Muzammil Aslam says that the reason for the slowdown in growth next year is that the country is facing an energy crisis and energy supply is essential for economic growth. With this, the government has so far raised interest rates by four per cent and it is likely that in the coming days this interest rate will increase further which could go up to 20 per cent. With this high interest rate, 6% growth is not possible in the coming financial year. SORS by BBC URDU .COM Tanveer Malik Journalist, Karachi

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