Executive Summary Financial year 2020 is one of the worst year in financial point of view. As the GDP reaches to the negative in first time of Pakistan’s history. Along with it the disaster of COVID-19 has made many businesses to shut down, and those who get survived are having very bad impacts, almost negative profit ratio of everyone. Almost in every sector Pakistan have faced the down fall. To overcome this situation Pakistan must have to look again on its polices and work hard on each and every sector. And also consider other rising talents and support them which can help to develop the economy again. Especially the import/export sector. GDP fall GDP this year fall to the negative, the least in the history of Pakistan. In 2019 the GPD was 1.9 Percent and it fall to negative 1.5 percent in 2020. This fall is the first noticed contraction of the decade. The primary and main reason behind it is the pandemic situation of COVID-19. This devastating virus have a great impact on economy. And it has affected the economy in many ways that impacted the monetary and fiscal tightening to the outbreak of COVID. So because of it, the economy face the very negative impact. Areas of Defecation Areas Fiscal Year 2019 Fiscal Year 2020 GDP 1.9% -1.5% GNI 297.790 Billion USD 282.806 Billion USD Current Account 4.8% 1.1% Fiscal Deficit 9.1% 8.1% Imports 4.546 Billion USD 3.9 Billion USD Exports 9.55 Billion USD 2.2 Billion USD Agribusiness 0.58% growth 2.67% growth Service Sector 3.75% -0.59% Growth Rate 1.9% -0.4% Per capita Income 1455 USD 1358 USD Inflation 6.8% 11.2% Government total revenues 4900.7 Billion PKR 6272.2 Billion PKR Total tax revenue 4473.4 Billion PKR 4747.8 Billion PKR FBR tax Collection 3829.5 Billion PKR 3997.9 Billion PKR Government total Expenditure 8345.6 Billion PKR 9648.5 Billion PKR Total debt and liabilities 40223.1 Billion PKR 44556.4 Billion PKR Foreign exchange reserves 14482 Million USD 19400 Million USD Foreign Direct Investment 1362.4 Million USD 2561.2 Million USD Worker’s remittances growth rate 9.2% 6.4% Reason Let see what happens in the beginning of 2020. A Virus named COVID-19 attack the whole world that causes the pandemic situation and all the world get closed. Same happens in Pakistan. So Government imposed the lock down firstly in order to stop the pandemic in the country. Also the ultimate shutting down of airline service industries happened to stop spread the COVID. Similarly, public places, gatherings, malls and other businesses get shut down for some time and then after some time were only open in the prescribed timings. Due to all of this many of the industries and business were shuted down and no longer working for almost half of the year. This causes many problems in industry and economy like, flow of money in the market was very low, decline of Job ratio in huge percentage. Because of it many small businesses did not survived as they couldn’t make their self able to meet the market demand. By different reports only service sector has shrinked by 1 percent in this decade. And on the other hand, contraction effects on consumer side has deadliest impacts such as the inflation rate was higher as compared to the last fiscal year and the consumption has been reduced by the normal households, also the investment rate was really badly impacted by this and in contrast the government spending were rose to encounter the pandemic. Suggestion In the following financial year, GDP development has to rise marginally to 0.9pc, so that it can approaches to 3.2pc in 2022. Because of these advancements Pakistan’s monetary situation is compressed as the duty assortment is affected hugely while on the other hand spending needs are expanding. The GDP execution depends on development of 1pc in farming this year, of 2.1pc decrease in mechanical yield and fall of 1.7pc in area of administrations. Agribusiness sector have to develop by 1.7pc in financial year 2020-21 and 2.3pc in financial year 2021-22. Current record of shortfall is extended to 1.9pc in financial year 2020, because of the more contraction of imports then exports. Fare development also required to be negative in financial year 2021 so it can bounce back to 6.7pc in financial year 2022. The fiscal year has impacted our economy very badly and it has to been widen by the new development areas and sectors. The development authority should seriously look into the matter and need to take some extra measures reading the fiscal deficit. Also the fiscal policy can be richly handled with extreme care and huge following up the current account expenditure and revenue accounts holdings and the government should also need to revise their policies for the companies whose sole business is to import or exports Conclusion In a very nut shell or to sum up the fiscal deficit of the year 2020 has very extreme impacts on the economy of Pakistan. In my personal opinion the economy of Pakistan has been badly stuck by the deadliest natural disaster COVID-19. The economy of Pakistan has been in a stage of development and in this stage the impacts of these pandemics raised numerous problems in the economy of Pakistan. The fiscal deficit of the year 2020, is contracting because of the global impact on these COVID19 disease and the other aspects may be of poor negligence of the government and lack of communication between the autonomous bodies and the government., also the revised policies will ensure industries and businesses to produce more and more earn the profit and ultimately the economy will boost up.
