Islamabad: For the first time in 68 years, Pakistan’s economy is set to contract in the outgoing fiscal year with a negative 0.38 per cent due to the adverse impact of the coronavirus pandemic coupled with the already weak financial situation before the pandemic hit the country, according to the economic survey unveiled on Thursday. Also Read - 'China Caused Great Damage to US': Trump Sharpens Attack on Beijing Again Over COVID-19

Advisor on Finance Abdul Hafeez Sheikh, releasing the Pakistan Economic Survey 2019-20 said the economy suffered massively due to the coronavirus pandemic which has so far infected about 120,000 people in the country and forced the government to impose lockdown in March for several weeks. Also Read - International Flights: SpiceJet to Operate 19 More Flights to Evacuate Stranded Indians From UAE, Saudi, Oman Under Vande Bharat Mission

The pandemic has badly hit the economy in the current fiscal year ending on June 30. Also Read - Coronavirus in Maharashtra: State Records 5,368 New Cases; Death Toll Breaches 9,000 Mark

For the first time in 68 years, Pakistan’s economy has marginally contracted by 0.38 per cent in the outgoing fiscal year due to adverse impacts of novel coronavirus coupled with economic stabilisation policies that had hit the industrial sector much before the deadly pandemic.

Except for the agriculture sector that grew 2.7 per cent, the industrial and services sectors witnessed negative growth rates, pulling the overall growth rate down to negative 0.38 per cent in the fiscal year 2019-20, ending on June 30, the economic survey said.

The per capita income in dollar terms has also dipped to 1,366 – a contraction of 6.1 per cent, but it increased in rupee terms to Rs 214,539.

Sheikh said the International Monetary Fund (IMF) had warned about the dire impact of COVID-19 on the developing countries due to drop in exports and remittance.

Exports fell due to a fall in global demand while remittance decreased due to layoffs of Pakistanis employed abroad, he said.

The overall tax collection grew by 10.8 per cent to Rs 3,300.6 billion during July-April 2020 against Rs 2,980 billion in the comparable period last year. The tax collection estimate for this period was Rs 4,510 billion.

He said the current account deficit was reduced by 73.1 per cent to USD 2.8 billion (1.1 per cent of GDP) against USD 10.3 billion last year which was 3.7 per cent of GDP.

“The current account deficit that we inherited was around USD 20 billion but we have reduced that to around USD 3 billion. This is a huge achievement of the government,” he said.

He said the government controlled state expenses and did not borrow from the State Bank of Pakistan during the outgoing fiscal year.

“This was the first time, I think, in the country’s history, and our primary balance meaning our expenses were less than our earnings went into surplus,” he said.

He said Rs 3,000 billion were set aside for payment of loans in the coming year while Rs 5,000 billion were given in the outgoing year. He promised more relief in the new budget and also reduced taxes and not imposed any new tax so that industry should be given relief and incentive to grow.

Minister for Economic Affairs Khusru Bakhtiar said that this government had USD 9 billion forex exchange reserve when it came to power in August 2018 and by the end of this year it would be more than USD 18 billion.

He said that the total external debt of Pakistan was USD 76.5 billion which was negatively impacting Pakistan.

He said the debt was USD 40 billion in 2013 and rose to USD 48 billion by 2013 during the tenure of Pakistan Peoples Party and again increased to USD 73 billion by 2018 in the five years of Pakistan Muslim League-Nawaz.

The economic survey is considered as the most authentic document of the government and is launched every year before the announcement of the budget of the next year.

The government has already announced that the budget for 2020-21 will be presented in parliament on June 12.