Karachi: Pakistan will not be able to meet the GDP growth target of 5.5 percent this year due to the decline in cotton exports. GDP growth rate this year is expected to be at around 4-5 percent. Oil prices have gone down and will remain the same for some years. Pakistan’s economy has been benefited due to low oil prices but at the same time Pakistani exports will suffer due to this. Oil prices crisis will have a great impact on the Middle Eastern countries economy and will tend to affect Pakistan’s economy as the majority foreign remittances of Pakistan come from the Middle East countries.
These views were expressed by Deputy Governor State Bank Riaz Riazuddin while addressing a seminar entitled “Monetary Policy Challenges in Pakistan” organized by Applied Economics Research Centre KU at AERC Auditorium, KU, Monday.
He maintained that the ultimate objective of the monetary policy of a country is to seek social and economic welfare of the citizens. Monetary policy of Pakistan is now devised by an autonomous body i.e. Statutory Monetary Policy Committee consisting of economic experts and is free from all sorts of governmental influence which is done in the present government. Growth rate increases with the increase of inflation but in some cases growth rate declines with the decline in the inflation rate.
The ratio of unemployment is high that needs to be curtailed by having higher GDP growth rate. He further observed that this perception has no strong factual grounds that economies of the military regimes in Pakistan were better than the democratic government’s economies.
Dean Faculty of Social Sciences University of Karachi Prof. Dr. Moonis Ahmar in his concluding address pointed out that the major reason of the economic uplift in the military regimes of Pakistan was the massive foreign aids in those regimes. Monitory policy of the country must be professionally designed, reviews on periodical basis and no interference must be ensured at all levels. It’s indeed commendable that State Bank of Pakistan and the Statutory Monetary Policy Committee is now autonomous and free from governmental influence. The gap between imports and exports and tax to GDP ratio must be curtailed in order to strengthen the economy.