Karachi: Moody’s Investors Service has stated that Pakistan’s economic growth is not likely to contract as much as some experts had formerly anticipated due to the government’s timely implementation of several incentive measures; such as the relief package announced for the construction industry and the decision of reopening some industries — which will cumulatively help to buffer the national economy against the impact of COVID-19, a news source reported.
The statement further said that Moody’s expect Pakistan’s real Gross Domestic Product (GDP) to contract only 0.1% to 0.5% in FY 2019-20 – which is nearly 1-1.5% lower than the previously anticipated. The expected contraction is however the first of its kind in the last 68 years – since FY 1951-52.
At the same time, however, the various measures announced by the government will widen the fiscal deficit – expected to increase to 9.5% to 10% of the GDP because of the lower revenue in the second half of the current fiscal, despite nearly 40% higher revenue collection in the first half.
However, the economy will recover during the next fiscal and a growth of about 2% is expected FY 2020-21.