Pakistan in Media

The News International, Pakistan

Friday, June 12, 2009

Much of what was unveiled by the ministry of finance via the Economic Survey 2008-09 was expected and served to only confirm that the economy is well and truly in recession. A telling statistic was the reduction in imports for 2008-09 -- by over 26 per cent compared to the previous year. Since a country's imports are a direct correlation of its income and GDP, the single statistic alone should be enough to confirm that the economy is now on a recessionary path. Another related statistic is growth in the manufacturing sector which actually shrank by 3.3 per cent during 2008-09 compared to an increase of 4.8 per cent last year (large-scale manufacturing, a sub-head, shrunk by 7.7 per cent). The economy's growth rate was markedly down from estimates made at the beginning of the financial year – when it was predicted to be well above five per cent – at a worryingly low two per cent. This is more or less half of what the economy managed to achieve during 2007-08 which was first put at 5.8 per cent and has now been clipped to 4.1 per cent – which means a reduction by almost 50 per cent! This is to be expected given the significant pressures on the economy: the worldwide recession (other countries have suffered far worse, a case in point being several EU states where GDP is predicted to actually in real terms) and the fallout of the war on terror in terms of a vastly deteriorated law and order situation and its obvious consequence in terms of a negative outlook for business and investment prospects.

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