Pakistan will set a target growth of 2.3% in 2020-2021 fiscal year and Prime Minister Imran Khan is scheduled to present the 2020-2021 budget on Friday, in a parliamentary session attended by only 25% of total lawmakers due to health and safety measure. The GDP target growth also incorporating the contributions of some sectors, such as agriculture, services, and industry, in respective percentages of 2.9%, 2.8% and 0.1%.
The forecast is much more positive than 0.2% contraction estimation by World Bank in early June, as the institution project growth of -2.6% by June 30, the end of this fiscal year, while government predict 0.4% in yearly growth. The 2020-2021 planning commission sees the trade deficit touched 7.1%, an average inflation rate of 6.5%, while the current account deficit is at 1.6% of GDP. Exports forecasted to grow by 1.5% and imports at 1.1%.
This country inflation hit 14.56% in January, marked a record high in the last decade.
Before the pandemic hit in March, the future spending calculation at 7.6 trillion Pakistani rupees ($46.76 billion), growth had calculated at 3% in 2020-21, and a probability in the fiscal deficit of 6.9% of GDP, much lower than the projection from the finance ministry, resides over 9% for 2019-20. The spending consists of 1.402 trillion Pakistani rupees ($8.63 billion) for defence, up more than 12% from last year, and 3.235 trillion Pakistani rupees ($19.90 billion) for debt servicing. The paper also calculated the development of public sector allocation of 700-900 billion rupees. This was a higher amount compared with the newer planning at 650 billion rupees ($4 billion). Before the presentation on Friday, The National Economic Council (NEC) have a plan to review the budget estimates and able to make changes.
Pakistan has been impacted hard by the coronavirus outbreak. In the coming financial year, the country is pressured with about $10 billion in service cost debt. The country needed funds to stave off a balance of payments crisis, and have an intention to use up around $14 billion in inflows. This amount is more than the country has obtained in a single-year loan. The sum includes $6 billion from multilateral banks, $3 billion in Chinese commercial loan rollovers, $2 billion from last year’s IMF bailout package, $1.5 billion from Eurobonds, and other $1.5 billion from Saudi oil repayment facilitation and bilateral aid.
