Pakistan’s Economy Shows important Signs of Improvement

The administration will continue to follow the good reform trend to improve the size of Pakistan's economy, with notable signs of economic recovery, and create a stronger basis for a robust, inclusive and durable recovery.

This is stated in the June 2021 Monthly Economic Update and Perspective that the "Pakistan[Pakistan] economy has showed strong signs of economic recovery, and rapid economic dynamics resume."

The Government has, according to the report, implemented and documented extensive steps to guarantee sustainable growth:

The government has adopted growth-oriented policies in the recent 2021-22 budget, and will continue to follow the good momentum of change that will assist enhance Pakistan's economy' s competitiveness and provide a solid platform for a stronger, inclusive and durable recovery.

The research revealed that, owing to the return of economic activity and an acceleration of the vaccinating process, the economic recovery will continue in the next months. In addition, investors' trust has been building with the recent economic rebound (actual GDP growth of 3.94 percent in fiscal year 2021).

He further read, 'Without macroeconomic imbalances, the economy is anticipated to retain its trajectory of increased growth.'

The report also shared the performance of the different sectors of the economy and explained in detail that production in large-scale areas exceeded pre-pandemic levels in July-April 2021 with a high growth rate of 12.8 percent over the past fifteen years, compared to its 8.7 per cent drop last year. The LSM's increase was 68% year-on-year (YoY) in April FY 2021.

On the other hand, CPI inflation declined to 10.9 per cent in May 2021 when the gasoline, power and food costs decreased to 11.1 per cent in the previous month.

Consumer inflation was 8.8% compared to 10.9% in the comparable period of the last year, during July–May FY 2021. The Government's supply-related actions, combined with tight administrative monitoring and inspections have kept prices in check throughout the country.

For the week ending on 17 June 2021 after three weeks of succession decreases, the weekly SPI that catches the price movement of 51 key products reported a 0.28 percent gain.

Substantial tax collections increase and cautious spending management, while in the first ten months of the current fiscal year, resulted in superior fiscal performance.

In the period July-April 2012-2021 the fiscal deficit has fallen to 4.2% of GDP (Rs. $2.020 billion) over the comparable period of the previous year, from 5.3% of GDP (Rs. 2.222 billion).

The primary balance remains surplus, with a deficit of Rs. 159 billion (0.3% of GDP) compared with a deficit of Rs. 205 billion (0.5% of GDP) previous year.

In comparison with Rs. 3 549 billion in the same time last year, the net provisional tax collection grew by 17.5% to Rs. 4 170 billion. The net income of Rs. 3.994 billion by Rs. 176 billion has been exceeded. The national tax collection grew by 17.3% over the study period, while customs income increased by 18.7%.

The current account reported a surplus of US$ 153 million (0.1% of GDP) for July-May FY 2021, due to 29.4% increase in workers' remittances and 10.3% rise in exports.

In May 2021 ($1,2 billion last year) exports amounted to 2,1 billion Dollars, bringing YoY's rise to 69.0 per cent.

Foreign Direct investment was recorded in July-May 2021 in the order of $1,751.7 million compared to $2,422.7 million last year and €2,172.9 million in total foreign portfolio investments in July-May 2021, respectively.

The settlements rose to 26,7 billion dollars in July-May FY 2021 when compared with 20,6 billion dollars last year, up 29,4 percent.

The sending figures for May 2021 at $2.5 billion ($1.8 billion for May 2020) showed a rise of 33.5% on a YoY basis, and for 12 straight months the sending of employees was over $2.0 billion.

On 11 June, 2021 Pakistan has raised its total liquid reserves to $23.6 billion. After 5 July 2017 reserves were $16.4 billion in Pakistan State Bank reserves while reserves of commercial banks remained at $7.2 billion.

In May 2021, the Pakistan Stock Exchange (PSX) also saw exceptional development. At May, the KSE100 index won 3,820 points and ended on 31 May in 47,896.

Likewise, PSX's market capitalization rose by Rs. 570 trillion and ended on 31 May 2021 with Rs. 8,267 trillion. On 2 May, the daily trading volume of the PSX was all time high as 2.21 billion shares were exchanged in only one session.

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