ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) government put the fast dwindling economy of the country on the path of rapid growth despite COVID pandemic that played havoc globally; however, PDM government through “regime change conspiracy” reversed all the hard economic gains of Imran Khan-led government, inflicting more economic catastrophe to the country then the accumulative damage caused by floods, earthquakes and COVID.

This was maintained by the party in a “white paper on the economic catastrophe” caused by the PML-N government (2013-18) and PDM government after toppling the PTI’s. In the white paper, the economic indicators have been shown that when PTI took over the government in August 2018, the economy was on the brink of collapse, as current account deficit (CAD) for FY 2018 stood at $19.2 billion, SBP reserves were recorded at $9.4 billion and $32 billion loan payments were needed immediate funding.

Moreover, it stated that the rupee was over-valued by 23% against USD, exports declined by $10 billion over five years while imports increased by $23 billion, creating a hole of $33 billion in our reserves, besides fiscal deficit was 7.6% of the GDP.

PTI issues ‘white paper’ on PDM govt’s performance

There were no investments in the agriculture and industrial sectors. The white paper revealed that the PML-N left behind a mess in the energy sector by overbuilding the power sector supply through imported fuel power plants which had USD linked capacity payments, it added. It further stated that the circular debt PTI government inherited was Rs 1.6 trillion and annual capacity payments were Rs 450 billion in FY 17/18, rising to Rs 1.4 trillion in FY 22/23. Prime Minister Imran Khan tried his level best to raise foreign loans from friendly countries to fund the CAD and pay loan payments; however, the pledges, although generous, were not enough.

Therefore, Pakistan approached the IMF that attached tough conditions to increase discount rate by 325 basis points, electricity and gas tariffs and fuel prices.

PTI government reduced fiscal deficit to 5.5% of GDP by increasing taxes from Rs 3.7 trillion to Rs 5.5 trillion in a single year. The white paper noted that once in a century flu (COVID) infected millions of people globally, as it threatened lives of millions of Pakistanis, besides severely impacting the economic growth.

However, despite such challenging situation, PM Imran Khan’s commendable handling of the COVID crises saved hundreds of thousands lives at home and limited the economic cost to -1% of GDP, as even World Bank, WHO and Economist ranked Pakistan amongst the top three countries in terms of better management of COVID.

While dealing with COVID, ex-PM Khan kept investing in agriculture, construction and local and export industries, it added.

It added that the tax machinery was getting revived and inflows into energy circular debt were being reduced.

“In the 75 years of Pakistan economic history, we have made rapid economic growth when we received US aid for helping them, Ayub Khan (SEATO, CENTO), Ziaul Haque (Afghan war) and Musharraf (war on terror),” the paper highlighted. It was said that despite facing the global commodity super cycle which pushed prices of imported items such as Petroleum products from $70/barrel to $115/ barrel, edible oil from $780/ton to $1500/ton and Coal from $80/ton to $280/ton, we were successful in keeping CPI at 12.7% and SPI at 14% in March 22, besides due to the proactive monetary and fiscal measures, CAD started reducing to under $1 billion per month. The economic indicators spoke volume of PTI government spectacular performance, as GDP growth jumped from 5.74% in 2020/21 to 6.1% in 2021/22, agriculture sector growth stood at 4.4%, LSM sector growth 11.7%, overall industrial growth at 7.2% and services sector growth 6.2%.

Similarly, the paper revealed that exports remained $32 billion, remittances were $31 billion and tax collection was Rs 6.15 trillion, which were highest ever in the history of the country, besides creating 5.5 million new jobs in three years, it added.

“The economic indicators showed that PTI reduced CAD from $19.2 in 2018 to $17.3 in 2022, import of goods from $55.7 to $72.00, export of goods from $24.8 to $32.5, total exports as a percentage of GDP from $8.6 to $9.1 in the same period,” it added.

Moreover, it further stated that PTI achieved 6% growth in 3rd year of government and PML-N achieved it in the 5th year, besides PTI is the only government since 2007 which achieved 6% growth two consecutive years. Agriculture sector growth of 4.4% in FY22 is the highest posted since FY05, as during PPP government from 2009 to 2013, agriculture growth was 2.4 percent and PML-N government from 2014 to 2018, it was 2.2 percent.

Similarly, the LSM growth of 11.5% in FY21 and 11.7% in FY22 are the highest recorded since FY 2005 and growth of 6.2% in the services sector (transport, retail, banks, health & education etc) is the highest growth since FY 2007.

The white paper showed that IT exports witnessed record increase from $1 billion in FY18 to $ 2.5 billion in FY 2022. It was revealed that exports and remittances recorded historic upsurge as exports rose to $ 32 billion in 2022 for first time in our history from $24.8 billion in 2018 and remittances grow to $31 billion, which was $19.9 billion in 2018.

The paper pointed out that despite record high commodity prices, CAD remained lower than 2018. The white paper shed light on the PDM government’s abysmal performance that devastated households and all business activity, leading to sharp slowdown in growth and rise in unemployment.

The PDM government opened a floodgate of inflation, which badly eroded purchasing power of households, leading to sharp increase in poverty rates.

The lowest overall GDP growth of 0.5% in 75 years spoke volume of the imposed government pathetic economic policies.

The PDM government ruined the fast thriving economy, as annual inflation recorded highest at 38%, which was 12.2% in PTI government, while food inflation was 50% in PDM government that was 14.8% in PTI tenure. The paper showed that PDM government broke all record of backbreaking inflation and unemployment by rendering over 2 million people jobless in last 16 months, besides bringing 20 million below the poverty line.

During PDD government, remittances declined to $27 billion compared to $31.3 billion left by PTI, while exports dipped to $27.7 billion vs $31.7 billion in PTI last year, besides depleting foreign reserves alarmingly. It was said that despite IMF funds and $ 3 billion deposits from friendly countries, SBP reserves was still below two months of import cover, one of the worst rupee depreciation in any government.

The white paper revealed that almost 20 trillion additional debt accumulated in span of 16 months vs Rs 18.3 trillion by PTI in 40 months despite COVID. Reckless spending and tax breaks for political bribery has led to the fastest accumulation of debt in Pakistan’s history.

GDP growth tanked to 0% under the PDM government, from 6% under PTI government, as IMF staff estimates growth of -0.5% in FY23 compared to PDM estimates of 0.3%. It was noted that LSM sector growth collapsed to -8% under the PDM government in FY23, whereas under the PTI government, LSM grew at over 11% for 2 consecutive years, besides exports declined 15%, after record exports under PTI from $32.5 billion to $27.7 billion.

Moreover, remittances posted 14% decline under PDM, after record growth under PTI government from $31.3 billion to $27 billion.

Market confidence eroded post-VONC and the risk of default skyrocketed in the first year of the PDM government to nearly 50%, the highest ever recorded in Pakistan’s history.

The white paper showed that PKR weakened by Rs 60 under PTI government, whereas rupee weakened by Rs 100 under the PDM government of 16 months, according to the white paper.

Copyright Business Recorder, 2023