Pakistan’s Economy is Reviving Despite Covid-19 Pandemic
Pakistan’s Economy is Reviving Despite Covid-19 Pandemic. So the biggest challenge facing our world is the 2007-2008 financial crisis and the ongoing coronavirus pandemic. The former has affected more modern and interconnected economies, and the latter has caused severe damage worldwide. Its impact is not limited to the fact that, however, as more developed economies return to normal economic growth after mass vaccination In appearance, the Global South continues to fight this epidemic.
So Pakistan is located on the border of the pandemic raging on the border with India, and despite the pandemic, it is still miraculously flourishing. A recent Forbes report stated that Pakistan’s economy will grow by 4%. In this blog, we learned in detail about all measures to promote Pakistan’s economic revitalization. According to a report by Forbes, this stable or stable economic growth is attributable to the expansion of the service industry. The magazine claims that the service industry will grow by 4.43%, in addition to agriculture by 2.77% and industry by 3 times.57% These numbers look promising and can be directly linked to timely and appropriately defined plans by the government and its competent authorities.
Revival of Pakistan Economy
Stabilizing of the Economy
In the face of global economic turmoil, the first thing Pakistan can do is implement fiscal and monetary policies. In view of the pandemic, the State Bank of Pakistan (SBP) kept interest rates unchanged at 7% and lowered interest rates.
In addition to these policies, the Pakistani government has also introduced 5% GDP stimulus measures to stimulate the economy, temporarily reduce the liquidity of borrowers, loan restructuring, and new temporary refinancing arrangements. Discharge prevention (Rosegar plan), medical institution support, and investment promotion (TERF). This paid off because Pakistan’s debt ratio has not changed compared to other countries in the region this fiscal year.
Prime Minister Imran Khan did not expand the scope of the wide quarantine and accepted the lifting of restrictions according to industry-wide methods, thereby keeping the economy stable. In the construction industry, in addition to construction service packages that pave the way for rapid activities in related industries such as glass, cement, and steel, SBP also pointed out that the construction industry is also growing. … Automobiles, textiles, food, and manufacturing.
Inflows & Outflows
As prime minister after the election, Imran Khan promised to increase remittances and call foreign economic backbones. In order to facilitate the transfer of funds back to the country, Prime Minister Khan also proposed a bill. Roshan Digital (RDA) cooperates with leading Pakistani banks for wire transfers. It also generated a record monthly cash flow of US$2.8 billion and a total of US$24.2 billion in cash flow in April.
Moreover, due to the high value-added and competitive prices of textiles, exports also increased by 14% compared with the previous year. As a result, Pakistan was able to complete the second and fifth reviews of the International Monetary Fund’s plan and gained a positive impact on the international market by raising US$2.5 billion from undervalued European bond yields. carried out.
Able to turn a current account deficit of US$19 billion into a surplus of US$900 million. During the same period, the country’s gold and foreign exchange reserves also increased from 7.2 billion U.S. dollars to 16 billion U.S. dollars.
In addition, the Pakistan Stock Exchange (PSX) also had the highest trading volume, with 1.56 billion shares and 2.21 billion shares respectively.
Although Pakistan has been criticized for correcting imbalances through borrowing, these changes are mainly observed through economic means, thus stimulating the Pakistani economy. With this in mind, and overcoming all difficulties, the most common question is whether it is the right time to invest. The answer to this is, right now. Here’s why.
Why this is a good time to Invest?
Pakistan’s Economy is Reviving Despite Covid-19 Pandemic. As the economy stabilizes and grows rapidly, SBP President Reza Bakir said that now is the best time to buy or invest. Since the construction industry was the first industry to open up, this is also a way to act quickly, but many people associate it with the tax amnesty program and the construction industry relief measures, as summarized below:
- Developers and builders of the low-cost housing projects across the country now enjoy a 90% tax exemption.
- Developers and builders have also been exempted from paying the withholding tax on the purchases made for different types of construction materials and other related services.
- Capital Gains Tax (CGT) of 5% to 20% has been abolished, and people who sell off their
properties during this time, will not be required to pay any amount.
- Tax on sales of immovable properties has also been halved from 10% to 5%.
- Under FBR and Construction Relief Package 2021, investors will continue to enjoy tax exemptions by disclosing their sources of income.
- The deadline for the completion of the projects on board with the FBR tax amnesty scheme has also been extended till the end of 2021.
- State Bank of Pakistan (SBP), and commercial banks will continue offering loans worth PKR 378 billion till December 2021 under a mortgage financing scheme.
- For low-cost houses’ construction, the government will also offer a subsidy with an allocated budget of PKR 30 billion. The government will also provide an additional grant of PKR 300,000 for each of the first 100,000 constructed houses.
In addition, the government is working hard to complete the Naya Pakistan Housing Plan in a timely manner, which is an economical housing plan with economic benefits. All of these are the direction to a prosperous economy, ensuring higher returns in the short to medium term.
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