ISLAMABAD: Finance Minister, Senator Mohammad Ishaq Dar said Saturday that the macroeconomic indicators were showing a positive trend as GDP has grown this year by 5.3%, which was a 10-year high.
Chairing a meeting of the Monetary and Fiscal Policies Coordination Board here, the minister said that foreign exchange reserves were at a comfortable level, tax revenues have increased by 74% over the last four years, credit to private sector has increased by over five times, gas availability has improved, and load-shedding for industry has been eliminated and substantially reduced for commercial and domestic sector.
For the first time the size of the economy has surpassed $300 billion while on average, income of each Pakistani has increased by 22% since fiscal year 2012-13. Per capita income today stands at $1,629 as compared to $1,334 four years ago while inflation was on average 12% between 2008-13. The inflation has been contained at 4.16% much below the target of 6%. Policy rate of SBP has come down from 9.5% in June 2013 to the current 45 year low of 5.75%.
As per the party manifesto of PML (N), Pakistan has successfully completed its reform programme. During this period difficult key structural reforms in the country have been implemented. Completion of the programme has strengthened confidence of the international community in government’s economic agenda.
The government had put the country on the path of sustainable growth which is being internationally recognized and reflected in the improved ratings by all major rating agencies including Moody’s, S&P and Fitch.
Recently, researchers at the Center of International Development (CID) at the Harvard University have predicted that Pakistan’s annual growth rate over the next 10 years would be nearly 6 percent.
This is a one point GDP growth rate increase compared to their earlier projections whereby Pakistan GDP growth rate was set to grow at 5 percent by 2025.
The Minister also remarked that sharp deterioration of PKR – US exchange rate in the interbank market led to speculation and anxiety in the foreign exchange market. However, due to prompt action by the SBP resulted in stabilization and averted the high risk of speculation.
Earlier, Finance Secretary briefed the meeting on economic situation. He said the GDP growth of the outgoing fiscal year 2017 recorded at 5.3 percent is the highest in ten years. The impressive growth was on account of growth in services and agriculture sector while the turnaround in agriculture growth was due to government’s supportive policies and high credit disbursements.
The growth momentum in LSM continued, mainly supported by better energy supplies; lower commodity prices; and accommodative economic policies. The sector recorded an impressive growth of 9.7 percent in April 2017 as compared to (-2.9 percent) last year.
During July-April 2017, it recorded a growth of 5.58 percent compared to 3.85 percent. The meeting noted that external public debt to GDP has reduced from 21.4 percent in FY 2013 to 20.8 percent while net domestic debt increased from 38.8 percent in FY 2013 to 40.5 percent in FY 2016. As of July-March 2017, the net public debt stood at 59.3 percent below the threshold of 60 percent as prescribed in FRDL Act.
The Minister expressed the need for necessary measure to address the widening current account deficit, adding the government has already initiated a number of measures for exports enhancement.
The Governor SBP informed that monetary expansion during FY 2017 remained aligned with the overall improvements in macroeconomic indicators with substantial contribution stemming from pick-up in private sector credit. In fact, the private sector credit flows posted their highest level since 1999.
The credit to private sector recorded strong growth of 18.7 percent (Rs.633.2 billion) during July-23 June FY 2017, compared to 9.5% in the comparable period of FY 2016. The Ministry of Commerce informed that Pakistan’s exports have increased to EU countries where it is enjoying GSP plus unilateral concessions.
