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Thursday Mar 19 2020
Web Desk

'Alarming situation going to turn worse': GDP growth target revised downwards to 2.6%

Web Desk
Former finance minister Dr Hafeez Pasha. Photo; File

ISLAMABAD: The government has revised downward its GDP growth target from 3.3% to 2.6% for fiscal year 2019-20 keeping in view the outbreak of the coronavirus and poor performance of the agriculture and manufacturing sectors, according to a report.

According to the Budget Strategy Paper (BSP) approved by the federal cabinet under the chairmanship of Prime Minister Imran Khan, the government has brought all GDP growth estimates in line with International Monetary Fund (IMF) projections.

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The government envisages that the GDP growth would touch 3% in Financial Year (FY) 2020-21, 4.5% in FY 2021-22 and 5.1% in FY 2022-23, the strategy paper outlined. 

Financial experts have weighed the possible outcomes of the decision. 

Former finance minister Dr Hafeez Pasha, while talking to The News on Wednesday, stated that the unemployment rate was expected to surge phenomenally, and might increase from 5.8% to 8.1% by fiscal year 2020-21. 

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He said that the number of total unemployed might increase by 2.6 million, as this number stood at 3 million in FY 2017-18, and could be increased up to 5.6 million. 

“This is an alarming situation that is going to turn worse,” Dr Pasha said.

The BSP for 2020-23 further revealed that gross federal receipts envisaged an increase by Rs1,397 billion in fiscal year 2020-21, as they were estimated to stand at Rs6,401 billion in outgoing fiscal year 2019-20 and were projected to go up to Rs7,798 billion in FY 2020-21. 

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With the approval of the cabinet, the government has envisaged spending between Rs700 billion to Rs900 billion under the Public Sector Development Program (PSDP) over the next three years. 

The Finance Ministry has also decided that the government will make allocations towards social safety nets such as the Ehsaas and Benazir Income Support Program (BISP) a part of the overall development budget. 

Earlier, these allocations were not made part of the development budget and all governments in the past had treated them as part of the current budget. A major diversion from past policy now seems to be on the cards. 

Originally published in The News