Pakistan’s economy battered with fast depleting foreign exchange reserves showed little sign of recovery despite the International Monetary Fund (IMF resuming the extended loan program for the country was hit severely by the incessant floods brought on by what UN General Secretary Antonio Guterres called “monsoon on steroids.”
This gave credence to the speculation that the government might have to further cut the proposed annual Public Sector Development Program (PSDP).
Ahsan Iqbal, the federal minister for planning and development, in an exclusive interview with SAMAA TV, said that there will be no cut in the federal development program despite the difficult economic situation that the country is in.
The federal minister said the PSDP spending has already shrunk to Rs700 to Rs800 billion compared to around Rs1 trillion in 2018. He said the PSDP spending should have doubled in the last four years.
If the government put further cuts in the PSDP program it would mean reducing more development activities which would not suitable, the minister said adding that the government is making efforts to re-appropriate resources to provide funds for flood-affected areas and rebuild infrastructure.
The minister also promised that the annual will not fall below 3 percent.
“Despite the devastating floods, the growth rate will fall below 3%,” he assured.
Last week, the Asian Development Bank revised downwards forecasted growth rates for Pakistan due to record floods and other policy measures which would slow growth to 3.5%.
According to a revised outlook issued by the ADB, Pakistan had higher growth of 6% in the fiscal year (FY) 2021-22 due to higher private consumption and an expansion in agriculture, services, and industry — particularly large-scale manufacturing.
But in FY2022-23, the forecast said that Pakistan adopted stringent monetary policies to control inflation, fast depleting reserves, and a widening deficit but also major “climate headwinds”. All of these have contributed to lower than previously projected growth rates.
While lambasting the predecessors, Ahsan Iqbal said the Council of Common Interest (CCI) had approved National Flood Protection Program with the help of Dutch consultants in 2017.
Instead of taking this program forward, Imran Khan did not invest a single penny in it. Had the previous government invested some resources in a few projects, the scale of devastation by the floods would have been a lot less catastrophic.