How Pakistan’s Economy Suffered in 2020

The year 2020 was the worst year for Pakistan’s economy and this year it reached its lowest level of negative growth after many decades.

When we review the year 2020, nothing can overshadow the impact of the coronavirus pandemic and the devastation it brought both in terms of deaths and economic depravity.

According to statistics, Pakistan’s economy fell to negative growth in 1971 and 1956 and this year in 2020, Pakistan again suffered major losses due to the pandemic and faced an overall recession. The economic growth rate reached negative.

Economic policymakers had made policies to improve the economy and Pakistan’s economic growth target for 2020 was set at 2.3%, but the results were the opposite and the growth rate remained -0.4%.

Steps were taken by government officials at the Ministry of Finance, the Ministry of Planning, the Federal Board of Revenue, and the SBP to improve the economy in 2020 backfired.

The government’s performance at the end of the calendar year is usually measured in numbers, particularly the data about macro-economic indicators such as growth in GDP, fiscal deficit, current account deficit, and debt-to-GDP ratio, etc.

In 2020, the government’s performance could not be measured accurately due to the pandemic.

All measures and strategies related to revenue and expenditure kept turning upside down because of the coronavirus pandemic. It not only caused a loss of Rs 800 billion in tax revenue but it also hit the economy with a loss of Rs 1460 billion.

Dr. Abid Suleri, Executive Director of the Sustainable Development Policy Institute (SDPI), told News360 that, “The year 2020 is not like normal years and we have to look at the economic data of previous years in a slightly different way than this year,”.

According to Dr. Abid, it is not fair to compare the year 2020 with any other year and statistics because of the pandemic. The economic growth rate, fiscal deficit, and low level of industrial sector data should not be compared with other years.

Due to the lockdown, special attention had to be paid to the social sector and special funds had to be released for cash grants.

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Finance Minister Dr. Abdul Hafeez Sheikh said in a media briefing that after coronavirus, the federal government gave a special package of Rs. 1,250 billion. Despite the recession and low growth rate, it was very difficult to give such a package but these steps had to be taken for the welfare of the people.

Now, the government wants to accelerate economic growth through the development of large industrial units.