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Reopening Economic-Engine: Govt Improving IMF’s ‘GDP Outlook Report’ Indicators


Dr Saeed Ahmed Ali

LAHORE– COVID-19 pandemic outbreak has triggered huge losses to the global economies by shaking industrial productions, socio-economic bonds, worker-employer payment issues and related financial structures, around the world.

On the global economic front, developed and under-developed economies mutually are facing many new and escalating challenges, due to novel coronavirus pandemic.

Since the first diagnosed case of the COVID-19, the deadly virus has spread to over 213 countries and territories, with 9,876,507 confirmed cases, and a death toll of 495, 418, due to coronavirus, around the world while the epidemic is still spreading rapidly, triggering more and more losses to economies, World Health Organization (WHO) observed in its data.

Meanwhile, the International Monetary Fund (IMF) on Wednesday had revised downward the GDP growth rate target for Pakistan from 2 percent to one percent for the next fiscal year 2020-21.World’s top most economies including the US, China, Japan, France, UK, Germany, Italy, and many others are at the verge of collapse.

The situation has worsened as the world stock markets have been pounded while oil prices have fallen off a cliff, said a UN report which has been released recently.

Discussing the topic ‘Reopening and revival of  the Economy’, amid the IMF outlook report and its impact on US economy,  Mr. Andrew Duguay, a leading  US senior economist,  had highlighted different issues including unrecovered  jobs,  balance of employment scenarios, job reallocation and other issues, across the USA.

He had also provided an ‘employment mapping across industries’ as a benchmark, moving through the rest of the year and into 2021.

Noted  fora and leading economists had issued alerts and warnings to the world by indicating a ‘global economic recession’ as daily wage workers had been ousted from their jobs, amid factories’ closure and the healthcare systems had become overwhelmed, it said.

Prime Minister Imran Khan in his recent keynote speech via video link, at the World Economic Forum (WEF) had said that in Pakistan, 25 million people earn daily wages and due to lockdown they went out of jobs and the government came up with immediate emergency cash transfers. “So far, we have given cash handouts to 15 million families to mitigate immediate risks of lockdown,” the Prime Minister said.

To overcome economic crisis and boost economic growth in the coronavirus situation, the incumbent PTI government had pursued an unprecedented initiative to re-activate construction industry, which is considered as the ‘mother of all industries,’ sharing the biggest contribution to the economy both at national and international levels, a document of Ehsas Emergency Cash Programme revealed.So far, an amount of Rs 65.249 billion had been disbursed among 5.437 million deserving families across the country, under Ehsaas Emergency Cash Programme, it said.

Noted economist Dr Ashfaq Ahmed  told APP that amid the prevailing situation, the entrepreneurs and the industrialist should focus and work on innovation lines as protected equipment, preparation of masks and other COVID-19 related equipment for the local and export market were being demanded world-wide, adding this would boost the economy and GDP ratio.

He said that the demand of these items would be standing even after the pandemic. The employers should come-up with new ideas and explore new markets, he added. He  said that the COVID pandemic had imbalanced the service sector by hurting millions of lower-wage workers across the globe,  but in Pakistan it was commendable that the incumbent PTI government had given both protection and work to the daily-wagers by prioritizing physical proximity while announcing incentives for poor strata of the country, and re-establishing construction sector.

Talking to APP, Federation of Pakistan Chambers of Commerce and industry (FPCCI) President Mian Anjum Nisar lauded the State Bank of Pakistan (SBP) for slashing key policy rate by 100 basis points to 7 percent in an unscheduled meeting of Monetary Policy Committee (MPC) which has so far slashed the key interest rate by 6.25 percent from 13.25 percent since March 17, 2020.He said the rate cut was a welcome move by the government, and urged it to further consider the plights of the business community, by bringing rates to a more lower level.

To a query the FPCCI President said that since March 17, 2020, the reduction in policy rate by 6.25 percent was a commendable step of the government in the present situation that will positively help in  cost of doing business and will also encourage the investors and industrialists to invite more investment in the country.

He commended the SBP for going the extra mile in these arduous times which had left no stone unturned in providing relief to the financially distressed businesses.

The spokesperson of Punjab government Musarrat Cheema said while talking to APP that  the government had given an unprecedented stimulus package including 480 billion rupees for the exporters and business community, while 570 billion rupees relief to the citizens.

She said that the PTI government had adopted a comprehensive, dual roadmap by giving a mammoth stimulus package of 1.2 trillion rupees, to provide support to the destitute and needy strata of the country, amid COVID-19 which would boost the economy, bringing labourers back at their work.

Similarly under’ Ehsaas Programme’, 104 billion rupees have so far been disbursed amongst the daily wagers and deserving families, she added.APP

— The writer is working with Associated Press of Pakistan (APP)