Islamabad: Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh Saturday said the coronavirus pandemic was not an excuse as it had brought difficult times for the country by virtually inflicting a loss of around Rs3,000 billion to the national economy.
The consultant said in a post-budget press conference that it is impossible to accurately estimate the losses the economy will suffer because it is impossible to predict how long the pandemic will last and its severity.
Hafeez Shaikh said that the COVID-19 pandemic severely hit the economy and caused a loss of 3 trillion rupees. Compared with the actual target, tax revenue has been greatly reduced.
He said that the government has revised the tax target to 4.7 trillion rupees, but before the end of the ongoing fiscal year, the tax target will hardly reach 3.9 trillion rupees, which means that the account will lose more than 700 billion rupees. .
He said that Pakistan is not the only country infected with coronavirus, but it has swept the world and affected the health and economic sectors.
The consultant said that the industries, markets, transportation and other business establishments that keep the business cycle running have been closed, causing another unemployment problem.
He said that despite the financial constraints, the government tried its best to help the people in difficult times and announced a stimulus plan of 1.2 trillion rupees. In addition, it also purchased 280 billion rupees of wheat to provide working capital for farmers.
The consultant said that the first nine months of this fiscal year witnessed economic stability, but in the case of serious economic losses after the pandemic, this situation worsened during the post-COVID period.
He said that the most important responsibility of the government in the next fiscal year will be to fulfill its international commitments and repay the loan of Rs 29,000 crore. He added that about 5,000 rupees of loans have been repaid last year.
He said the amount of the loan repaid was enough to start more than 20 programs like Isaac to help the poor.
Hafeez Shaikh said that the government is making every effort to reduce expenditures and must make difficult decisions to achieve this goal.
The consultant said that despite the limited resources and the prevalence of COVID-19, the government has tried its best to provide civilian relief in the 2020-21 budget.
Speaking of the economic situation, he said that the government has inherited a deteriorating economy, which includes increased imports, reduced exports, depleted foreign exchange reserves, and expansion of current accounts and fiscal deficits.
He added that due to increased imports and reduced exports, foreign exchange reserves are under tremendous pressure, and the current account deficit has increased to 20 billion US dollars, while the current government has reduced it to 3 billion US dollars.
The consultant said that in addition to reducing all non-development expenditures to achieve economic stability, the government also made difficult decisions and introduced fiscal and financial discipline.
He said that due to continuous efforts, economic indicators began to show growth, and tax revenue increased significantly by 17%, while non-tax revenue reached 1.6 trillion rupees.
He said that the government’s economic reform plan has been widely praised by international credit rating agencies such as Mooody’s and development partners including the International Monetary Fund (IMF) and the World Bank.
He added that the recognition of the International Forum restored the confidence of local and foreign investors as foreign investment increased by about 137%.
He said that all government efforts were limited by the emergence of the COVID-19 pandemic, which also affected the global economy and millions of people.
He said that according to the International Monetary Fund’s estimates, total global income may fall by 1.4%, which also has a negative impact on Pakistan’s local trade and industrial sectors.
The consultant said that despite the limited resources, the government has launched a relief plan to provide financial assistance to the people to meet their daily needs. The program is implemented in a transparent manner, and more than 10 million people benefit from no political, regional or religious discrimination.