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Govt has prepared plan to achieve high GDP growth: Ishaq Dar

16 June, 2016

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ISLAMABAD: The federal Minister for Finance and Revenue Ishaq Dar on Wednesday said the government has prepared a future road map for next three years to achieve GDP growth as high as 7 percent. According to this road map measures will be taken to raise the foreign reserves to $30 billion, fix the fiscal deficit below 4 per cent of GDP and keep inflation within single digits. He was addressing the SECP head office to facilitate all the stake holders of capital market on MSCI reclassification of Pakistan’s Capital Market in the ‘Emerging Markets’ category. Ishaq Dar said that it was a historic day and said that the PML-N’s government had achieved most of the targets its targets on the economic front which have been part of its manifesto.

The Finance Minister said that country would not need the IMF following the upcoming 12th review of its fund. However, he appreciated the IMF’s contribution and assistance towards stabilising Pakistan’s fiscal position. He proclaimed that the country’s foreign reserves would hopefully be boosted to $22 billion by August. He said that Pakistan’s macro-economic indicators have been established and the world had recognised it. In future, the government will focus on achieving high growth and development. He said that Pakistan’s economy had the potential to do extremely well.

Ishaq Dar said that politics and economics must not be coupled and invited all political parties to join the government in formulating a future economic roadmap for the country. He said the government’s actions over the last three years contributed in improving the country’s security and winning the confidence of its investors. Dar said that there were a lot of pending legislations but the SECP had revamped most of its laws to ensure they were up to date. Another major achievement of the SECP in reforming its legal infrastructure would be the introduction of Companies Bill 2016 that will be introduced in the parliament in near future, he added.

The SECP Chairman said that next challenge ahead was the divestment of the stock exchange. He said a committee comprising all stakeholders had been constituted to search for an effective strategic investor for PSX. He hoped that PSX would be able to attract global strategic investors and financial institutions and form technological partnerships to fulfill the objectives of integration and become a major regional investment hub.

Counting the factors which contributed in achieving the status of emerging markets, Zafar Hijazi said that the recommendations made in Shamim Ahmed Khan’s report on Stock Exchange crises of 2008 helped SECP to overcome the flaws in the system. He said the SECP made the 2008 crisis report public despite opposition which restored the confidence of investors in the market.

He said the SECP also made significant improvement on the implementing the principles of International Organisation of Securities Commission (IOSCO). He expressed the hope that Pakistan would achieve up to 80 percent compliance with the IOSCO principles from the existing level of 62 per cent. Enhanced compliance with international standards helped Pakistan in graduating to MSCI Emerging Markets Index, he added.

Hijazi said the second major factor that helped attain this status was SECP’s continuous focus on strengthening its regulatory framework through the introduction of structural and legal reforms. The third major factor that cleared Pakistan’s path to the MSCI index was the successful integration of three stock exchanges, he said and added that now the critics of integration admitted that the merger had improved the investor’s confidence and strengthened the market.

The Chairman Board of Directors of Pakistan Stock Exchange (PSX) Dr Muneer Kamal said that the market stake holders were confident that Pakistan would regain the emerging market status. He said that during the recent PSX’s road shows in London, New York and Hong Kong, big fund managers from all over the world were briefed on recent reforms in the capital market as well as on the economic turnaround in Pakistan. The MSCI and the fund managers greatly appreciated Pakistan’s economic reforms and improvement in country’s capital market, he added. Muneer Kamal said the world now recognised that the Pakistan economy was now stable and offered excellent opportunities for investment. He said the government, the regulator and the stock exchange were on the same page and working towards similar goals.

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