Finance Minister Ishaq Dar has stressed the need for a comprehensive and better co-ordination between the monetary and fiscal policies of the country in the backdrop of a changing economic environment in the world. Chairing a meeting of the members of the Monetary and Fiscal Policies Co-ordination Board, the minister said that the government is cognizant of the declining exports and is trying to take all possible measures to reverse the situation. However, he emphasized that the areas of concern should have to be identified to arrest the trend of falling exports. Though the government believes that the macroeconomic indicators are showing positive growth, as the country has achieved 4.24 percent growth in fiscal year 2014-15, some drastic measures are required to minimize trade deficit. According to the official figures, the country has registered the highest growth during the last fiscal year and the government has taken a number of measures in the budget for the promotion of export. The current account deficit has narrowed to $159 million during July 2015-16 as compared to $820 million last year. The remittances sent by expatriate Pakistanis during the fiscal year 2014-15 have recorded a remarkable growth of 16 percent as compared to the last year and have reached $18.4 billion mark. The government also claims that foreign direct investment has started improving supplemented through investment in the Pak, China Economic Corridor.
The government has successfully contained inflation at 4.53 percent in 2014-15 against 8.62 percent the previous year. On another note, the foreign exchange reserve have been showing upward trend and have reached over $18 billion. The SBP has kept the policy rate unchanged at 6.5 percent with reduction of 100 bps in ceiling rate to 7.0 percent in May. The country has been facing energy crisis for the last two decades and there is no letup in load shedding under the present regime. However, the finance minister hopes that improvement in electricity and gas supply coupled with lower policy rate will bring improvement in productivity and growth.
As a matter of fact, Pakistan is still far from acquiring the status of a business friendly country and the cost of doing business is also increasing day by day. The government should understand that implementation of good policies through sick official machinery only invites troubles. If the government wants to improve exports, it will have to address the issues which are foiling the government attempts to bring economic prosperity in the country. The trouble is not in policies, but in the implementation process.
