Washington, April 16, 2015 (PPI-OT): Federal Finance Minister Senator Mohammad Ishaq Dar briefed US Investors and Businessmen regarding economic situation of Pakistan, under the auspices of US-Pakistan Business Council (USPBC), in Washington-DC. He assured them that the government was keen to resolve all genuine issues of the investors so that they could support government’s efforts to achieve higher growth and generate employment.
To attract investment was one of the top priorities of the government, he elaborated. He said, it was not possible to achieve higher growth target without increasing investment to GDP ratio in the economy. Finance Minister apprised the attendees of positive Economic Growth indicators. He said the growth rate that averaged around 3% in the five years of the previous government, has risen by 4.14% in last year and is projected to rise to 5.1% during 2014-15.
Inflation, he said, which had averaged around 12% in the previous government, was brought down to 8.6% in 2013-14 and is now projected to decline further to about 5% in 2014-15, which will be the lowest in the last ten years. Low inflation will, he opined, increase purchasing power of the people of Pakistan which bodes well for the investors.
Finance Minister shared that the Tax Revenues were up in the first year of the incumbent government by 16.44%, rising from Rs.1946 billion to Rs.2266 billion. This strong performance, he said, has been punctuated during the current fiscal year with a revenue growth of 13% until end-March, compared to last year, despite a massive decline in oil prices that adversely affected tax collections from the petroleum sector. He said the government was determined to expand tax base and will ban grant of tax exemption so as to provide a level playing field.
Finance Minister highlighted that reduction in inflation enabled SBP to reduce Discount Rate to 8%, which is lowest in the last ten years. He further observed that this will provide a golden opportunity to investors to undertake capital expenditure and expand production capacity. Furthermore in order to boost private sector borrowing government has decided not to use central bank’s credit for financing budget deficit which will reduce crowding out of private investment.
Finance Minister stated that it was a good news for investors that SBP reserves were over $11.8 billion while Commercial Banks reserves were around $5.1 billion. He expressed confidence that the Balance of Payments position will improve further and the Current Account Deficit will be brought to under 1% of GDP. Finance Minister stated that the Pakistani Diaspora had shown great confidence in government’s economic policies which was evident from remittances which had crossed $17.24 billion in last 12 months showing an increase of 16% over last year.
He said Exchange Rate has depicted remarkable stability and appreciation under the current government, which is a good omen for investors. Also the government was committed to implement its privatization agenda and in this regard the just concluded HBL divestment of $764 million was a feather in government’s cap.
Finance Minister said that Karachi Stock Exchange Index, which stood at 19,916 on 11 May 2013, the day the elections were held, has continuously scaled new heights and stood at 32,248 on 13 April 2015, showing an increase of nearly 62%. On the other hand, the market capitalization increased from Rs.5.0 trillion to Rs.7.1 trillion for the same period, showing an increase of 42%, while in dollar terms it increased from $51 billion to nearly $70 billion, showing an increase of 37%.
Finance Minister stated that the investors and businessmen should be encouraged by the recognition of Government’s achievements by independent institutions like IMF, World Bank and ADB. Similarly The Moody’s has improved Pakistan’s rating outlook first from negative to stable and then, more recently, from stable to positive. Moreover Japan’s Trade Organization, Peter O’Neil, the British Economist, and Morgan Stanley have all predicted that Pakistan will soon be one of the most significant economies in the world.
For more information, contact:
Director General (Media)
Nadeem Haider Kiani
Ministry of Finance
Government of Pakistan
Room # 514, Block-‘Q’, Finance Division,
Pak. Sectt. Islamabad
Tel: +92-51-9211707, +92-51-9208281, +92-51-9206382
Category: General Business News