By Muskan Naveed ISLAMABAD, Feb 15 (INP-WealthPK): The Ministry of Finance posted its monthly economic update and outlook report in December highlighting the performance of the Pakistani economy in the first quarter of 2021-22. While the new variant of the coronavirus, Omicron, has posed new challenges for the global economy, the outlook for the Pakistani economy has taken a positive turn. Real Sector The policies of the government to revive economic activity resulted in a phenomenal surge of the large-scale manufacturing – posting a record growth of 14.85 percent during 2019-20. As the effects of the pandemic wane off, the real sector of the country is picking up the pace. The Rabi season has begun in Pakistan where sowing starts in October-December and the harvesting takes place in April-May. Wheat is the major Rabi crop and the country has utilised 94.5 percent of the target area of 23.3 million acres for the cultivation of wheat. The current overview of the sector indicates fulfilment of the wheat production target of 28.9 million tons for the year. The large-scale manufacturing registered a growth of 3.56% during the first quarter of 2021-22. Eleven out of the fifteen total sectors of LSM posted a positive growth during the period with automobile showing the highest surge – at 37.9%. Fiscal Performance Fiscal discipline is crucial if the Pakistani economy is to achieve its long-term growth targets as it is the way towards getting the country out of the dreaded twin deficit. The government has been exercising better management of the expenditure and collection mechanisms during the first quarter of the new year – July to October. The federal receipts have climbed up 17.4 percent to Rs1,205 billion when compared to the same period of last year. On the other hand, the government’s expenditures have also risen by 11.7 percent to Rs2,171 billion on account of reviving the economic machinery of the country. As a result, the overall fiscal discipline declined to 1.1 percent of the current GDP. Monetary Performance The State Bank of Pakistan (SBP) has been aggressively pursuing a contractionary monetary policy in order to curb the rising inflation in the country; however, a major chunk of the inflation is being caused by rising global commodity prices including energy. The policy rate has been increased to 9.75 percent - after the third consecutive increase by the central bank. The Money Supply (M2) has posted a negative growth of 0.2 percent or Rs41.8 billion on account of the contractionary policy. The total credit extended to the private sector has also recorded growth. The total credit extended stood at Rs446 billion in July to October 2021-22, while the figure was at Rs35.4 billion during the same period last year. External Sector The current account deficit persists at 5.3 percent of GDP or $7.1 billion. The deficit is largely attributed to the growing demands of the industry in terms of energy and raw materials. The total imports during the period posted a growth of nearly 70 percent - increasing to $33 billion. One the other hand, the exports are vying to catch up with the rising imports. During the quarter, exports have increased by 26.9 percent when compared to the same period last year – currently standing at a valuation of $12.4 billion.