Early management of COVID-19 benefiting large-scale manufacturing sector: Asad Umar

ADB says nation might see 2021 financial restoration if COVID-19 subsided and structural reforms resumed. Photo: File

ISLAMABAD: Federal minister on Tuesday mentioned the federal government’s potential to manage the COVID-19 pandemic “early” was paying dividends because it has benefited the nation’s financial system when it comes to development within the large-scale manufacturing sector.

Minister for Planning, Development, Reforms and Special Initiatives Asad Umar termed the achieve as a “dividend of controlling covid early”, which paid off Pakistan “on the economic side also, as V shaped recovery gets confirmed”.

“Large scale manufacturing numbers for July show more than 9% growth over June and more than 5% growth vs July 2019,” Umar mentioned in a Twitter put up.

In a parallel improvement, the Asian Development Bank — which, in June, had permitted a $500-million mortgage to Pakistan as a part of the CARES Programme — mentioned in a report launched Tuesday the nation might see 2021 financial restoration if COVID-19 subsided and structural reforms resumed.

Pakistan’s ‘notable success’

Noting that Pakistan is “projected to experience a broad economic recovery in fiscal year (FY) 2021”, the financial institution mentioned it has “revised the 2020 growth forecast for Pakistan to -0.4% and the growth forecast for 2021 to 2.0%”.

The ADB’s Asian Development Outlook (ADO) Update underlined that though inflation shot up from 6.8% in FY19 to 10.7% in FY20, it was not projected to decelerate to 7.5% in FY21.

“The current account deficit eased considerably as merchandise imports fell steeply due to containment disruptions, lower oil prices, and local currency depreciation,” it mentioned. “As inflationary pressures eased, the State Bank of Pakistan cut its policy rate by a cumulative 625 basis points from March to June 2020 to 7.0% and introduced additional measures to support the economic recovery.”

In associated feedback, ADB Country Director Xiaohong Yang underscored Pakistan’s “notable success in containing the dual health and economic challenge presented by COVID-19”.

Current account deficit to stay ‘unchanged’

Xiaohong talked about the Pakistani financial system’s “signs of resilience and recovery”, saying what helped defend the poor and most susceptible through the pandemic was the PTI-led authorities’s speedy mobilization on August 24 of Rs1.2-trillion reduction package deal, comprising emergency monetary assist to each day wage earners, money transfers to low-income households, accelerated procurement of wheat, assist for well being and meals provides, and monetary assist for small and medium enterprises.

While the nation’s trade contracted 2.6% in FY20, the present account deficit is anticipated to stay “unchanged from the ADO 2020 forecast” in FY21.