The federal government only recently completed four years with a good record of better economic performance and positive indicators and entered the fifth year of its tenure with quite realistic, doable and achievable targets for sustained economic growth.

Pakistan’s economy remains under constant review of international financial institutions and organisations as well as donor agencies like International Monetary Fund (IMF), World Bank, Asian Development Bank and others. All these financial institutions in their periodic reports generally appreciate Pakistan’s rapidly forward moving economy and also point out shortcomings, which are taken due notice of by the senior authorities concerned and measures are taken to set things right at the earliest possible.

It is generally believed that figures speak louder than words. The federal government has also come out with facts and figures in support of its claim about rapid sustained economic growth during the last year, improving upon the poor economic situation it had inherited on coming into power in 2013.

According to facts and figures available officially about economic performance since 2012-13, Real Gross Domestic Product (GDP) growth stood at 5.28 percent at the end of the last fiscal year and has been described as the highest in the past decade. Comparatively, four years ago, economic growth was 3.68 percent. For the first time, the size of the national economy has surpassed the 300 billion dollar mark.

Agriculture is the backbone of the national economy and it is good to note that it has registered a turnaround. The agricultural sector has performed impressively this year. Compared to last year’s stagnation, this sector has registered a robust 3.45 percent growth.

Industrial production has also grown appreciably by 5.02 percent and resultantly, businesses are now hiring additional workers to put their houses back on track and meet the growing demand.

Banks, retail houses, transportation and housing, which constitute the services sector have also registered growth by 5.98 percent.

The federal government strictly followed a policy of fiscal consolidation during the period under review and this resulted in reducing the fiscal deficit from 8.2 percent to almost half; 4.2 percent this year. This achievement was made possible through higher revenue collection by way of improved administration and broadening of the tax base, undoing the decades-old concessionary Statutory Regulatory Order (SRO) and curtailing non-development expenditure of the government to the maximum extent possible.

The Federal Board of Revenue’s (FBR) collection in fiscal year 2012-13 stood at Rs 1946 billion. For the previous year, the target was Rs 3521 billion, representing a historic increase of as much as 81 percent in the last four years with average annual growth of 20 percent. Final revenue collection figures are not immediately available but these are hopefully expected to be little more than the target. Likewise, tax to Gross Domestic Product (GDP) ratio which was 10.1 percent in fiscal year 2012-13 was likely to be around 13.2 percent this year.

The policy rate, periodically determined by the State Bank of Pakistan (SBP), is an important factor in economic policies of the federal government. The policy rate of the SBP has come down drastically from 9.5 percent in June 2013 to the current 45-year low of 5.75 percent. Similarly, mark-up rates of the export refinance facility have also been reduced from 9.5 percent in June 2013 to just 3 percent in July 2016.

This has obviously led to an appreciable spurt in credit to the private sector. Resultantly, credit to the private sector has grown to Rs 507 billion till May 2017 as compared to just nominal figures of Rs 93 billion in fiscal year 2012-13, making a major contribution in the expansion of business activity in the country. Four years ago, credit for the agriculture sector was Rs 336 billion which increased to Rs 600 billion at the end of 2016 and is targeted to increase to Rs 700 billion during the current financial year, almost double the figures of 2012-13.

Imports have been recorded at 37.8 billion dollars during July 2017 to April 2017, showing an upward trajectory as compared to the same period last year. This vibrancy in imports can easily be attributed to more than a 40 percent increase in capital machinery, industrial raw material and petroleum products and increased investment under the China-Pakistan Economic Corridor (CPEC) projects focused on the energy and infrastructure sectors.

As for exports, a minor decrease of 1.28 percent overall was registered during the first ten months of the last financial year, as compared to 7.8 per cent decline during the same period of 2015-16. This reversal, though apparently a bit slow, has been the result of timely support by the government to exporters in the shape of a comprehensive package of Rs 180 billion in January 2017 to boost the country’s exports.

In June 2013, foreign exchange reserves in real terms were 4.3 billion. As compared to this, foreign exchange reserves currently stand at a comfortable level of 16 billion dollars, despite a larger than expected trade deficit due to the increased import of capital goods. If foreign exchange deposits with commercial banks are taken into account, then total foreign exchange reserves of the country have appreciably increased to around 21 billion dollars. It is said that the country’s foreign exchange reserves should at least be enough for four months’ worth of imports.

Undoubtedly, over the past four years, remittances back home from a large number of expatriate Pakistanis have – over the past four years – increased from 13.9 billion dollars to 19.9 billion dollars. This 40 percent increase was made possible due to the government’s revival and payment of outstanding dues of the Pakistan Remittance Initiative. As a matter of fact, the low trend of remittances is worrisome for the federal government, which is taking all possible measures to exhort expatriate Pakistanis to remit their earnings back home through formal channels instead of the non-formal means such as hundi, and thus continue playing their positive role in substantially increasing remittances.

There is a lot more to talk about with regards to better economic performance of the federal government during the last four years which has obviously helped it fix quite realistic targets for financial year 2017-18 besides taking new initiatives and giving relief to different segments of society. These will be discussed some other time.