IMF happy economy is on track
04 February, 2014
ISLAMABAD: The IMF has said that the government was fully committed to the reforms agenda and the economy was now on track.
The IMF mission chief, Jeffery Franks, appreciated the efforts of the government and said that the macro-economic situation of Pakistan was favourable. The IMF believes that the Government of Pakistan was fully committed to the reforms agenda, he added.
Jeffery Franks appreciated the efforts of revenue collection by the FBR and also the other economic indicators of Pakistan'seconomy, which suggests that the economy is on the track and its outlook is positive.
The Federal Minister for Finance, Economic Affairs, Revenue and Statistics, Senator Muhammad Ishaq Dar, while chairing a meeting with the IMF delegates in Dubai, which was among others attended by senior officials of Ministry of Finance and State Bank of Pakistan, gave a detailed economic review of Pakistan's economy.
The finance minister said the government was following the Economic Reform Agenda and nearly all the economic indicators were on track. The first quarterly results of the economic growth in Pakistan indicate that GDP had shown a growth of 5.0 percent in the first quarter as compared to 2.9 percent of the same period last year, he added.
The minister said that Pakistan Bureau of Statistics, which is an autonomous body, had decided that henceforth the National Account Base would be changed after every 10 years. He stated that the next base year would be 2015 and the other 2025, which was a major advance in the country's statistical capability and determination to have accessibility of evolving economic conditions over a shorter period of time compared to annual accounts.
Large Scale Manufacturing (LSM), the minister said, had shown a positive growth of 5.2 percent during July-November, Fiscal Year 2014 as compared to 2.2 percent in the comparable period last year. Due to better energy and gas supply, fertilisers posted the growth of 32.8 percent, electronics 18.9 percent, paper & board 19.6 percent, leather products 12.9 percent, coke and petroleum products 8.8 percent, iron and steel products 4.4 percent, food beverages, tobacco 7.7 percent, chemicals 3.2 percent and textile 2.1 percent, he added.
He further said the credit to the private sector also increased to Rs231 billion as compared to Rs53 billion during January Fiscal Year 2014 over January Fiscal Year 2013.The finance minister said that arrival of important crops such as cotton crop had posted a growth of 7.5 percent over the last year as well, while other agriculture crops production was also likely to give comfort to growth targets.
Dilating on the external front, the finance minister said that exports were showing a positive result at 3.2 percent over the last year.The value added exports are taking place, which will be further increased due to accessing the GSP plus status, he added. Senator Ishaq Dar said the imports increased by 3.9 percent higher than the last year. The important thing is that import of machinery at 26 percent over last year is an indication of economic activities taking place, he added.
The finance minister said that remittances showed an increase of 9.5 percent higher than last year, which was helping the Balance of Payment (BOP) position and added that he was hopeful that there would be further improvement in the BOP position and foreign exchange reserves on account of expected foreign inflows.
The important indicator which, the minister said the headline inflation, was measured by Consumer Price Index (CPI) had been contained to 7.9 percent in January 2014 as compared to 8.1 percent in January 2013. Similarly core inflation was also contained to single digit at 8.4 percent against 10.3 percent last year, he added. The minister said that this was achieved due to the government's prudent expenditure management, effective monetary policy and close monitoring of inflation indicators.
Senator Ishaq Dar also highlighted that the expenditure management helped in reducing the fiscal deficit during Q2 at 2.2 percent against 2.6 during Q2 of last year. The Federal Bureau of Revenue's collection in January 2014 was Rs167 billion, indicating an increase of 26 percent over the collection of January last year was a positive signal to achieving the full year target.