The next fiscal year will focus on economic stability through investments rather than the old model of consumption-led growth. With the new monetary policy stance, the low-interest rates will result in more consumers and investors to finance. And above all, it is a great sign of economic boost and prosperity. In a similar fashion attracting more domestic and foreign investments in a post-corona world is a great challenge for Pakistan. However, businesses have some relief. Policies such as withdrawals on constricting taxes in terms of banking transactions can help drive investment and boost capital. Meanwhile, the fiscal year 2019-2020, reportedly saw the FDI (Foreign Direct Investment) triple within its first 10 months. With more than the double net inflow of $1 billion to a roaring $2.3 billion in 2020. There’s no reason anyone should consider investing outside of Pakistan with such astronomical numbers.
The nation’s increased consumption-led growth has impacted in significant growth of savings. However, sustainable investment within the commodity-producing sectors is much needed for persistent growth. On the flip side, the low saving rate is driving a wedge. It’s restricting investment to reach adequate levels in order to accelerate economic growth. Which is the reason that there has been an increased dependency on external financing due to low national savings.