ISLAMABAD: The Finance Ministry has taken prudent measures to ensure stellar record of economic performance of the country.
“Although, the stellar record of economic performance of Pakistan could not be maintained for the last one decade due to domestic and external factors, yet the Finance Ministry developed National Power Policy (2013) to provide a roadmap for providing affordable energy to resolve the energy crisis” a well placed source at Finance Ministry told this scribe here on Tuesday.
The other measures taken by the ministry include enhanced size of Public Sector Development Program (PSDP) which will focus on public sector development in agriculture, industrial and services sector.
Inflation has been contained through prudent fiscal policy along with effective monetary policy, regular price monitoring and smooth supplies of all commodities. Fiscal austerity measures have been adopted alongside increase in tax collection to reduce fiscal deficit and to create fiscal space for development projects.
These include 40% cut in the P.M office and 30% cut in all ministers/division’s current expenditures, discretionary funds of P.M and ministers discontinued, and Secret servicing expenditures of 32 Ministries /Divisions /Attached Departments /n Autonomous Bodies ceased.
Government has taken various initiatives to strengthen the foreign exchange reserves and exchange rate position such as successful launch of Euro bonds, Sukuk bonds, transparent auction of 3G/4G license, and entering into IMF program
The foreign exchange reserves which were at the lowest level $7.58 billion in February, 2014 has been increased to $16.07 billion as on 2nd March, 2015. Of which SBP reserves stood at $ 11.15 billion.
Under PSE Reform Strategy, government has initiated restructuring plan to reduce the losses of various corporation like Steel Mill, Railway and PIA. Long awaited GSP plus status by the EU has successfully been granted due to present government efforts which will boost our exports to European countries in years to follow
The Government has decided to set up the Export-Import (EXIM) Bank of Pakistan to enhance export credit and reduce cost of borrowing for exporting sectors. State Bank of Pakistan, has reduced its mark-up rate on exports finance from 9.4% to 6.0%, which will reduce the financial cost of exporters and helpful in boosting the exports.
Vision 2025 have been prepared with an aim to put the economy on sustainable growth and targeted to grow by over 8% between 2018 and 2025.
Main reasons which hampered the economic pace during the last one decade include the war on terror directly and indirectly affected the business activities in various sectors of the economy. Energy crisis is also a major factor due to which our economic performance remained slow especially in industrial sector which indirectly affected the other sectors.
Better foreign and domestic resource mobilization strategy could not be formulated and implemented. Natural environment disasters in 2005, 2010 and 2011 also remained a cause.
Global financial crisis also dampened the investor’s confidence. Furthermore, sharp rise in international oil and food prices affected the macroeconomic situation in Pakistan. Moreover, inflation reached at the highest level of 25 percent in October 2008.
The present government has identified various areas which needed improvement and initiated a comprehensive agenda of economic reforms focusing on energy reforms, better resource mobilization, eliminating militancy, PSEs reforms, bridging fiscal deficits and price stability.
