Islamabad: The Federal Minister for Finance, Economic Affairs, Revenue and Statistics Senator Muhammad Ishaq Dar while chairing a meeting with IMF delegates in Dubai, which was among others attended by the senior officials of Ministry of Finance, State Bank of Pakistan gave a detailed economic review of Pakistan’s economy.
The Finance Minister said that the present government is following Economic Reform Agenda and nearly all the economic indicators were on track. The first quarterly results of 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 ten year. He stated that the next base year would be 2015 and other in 2025 which was a major advance in country 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, Fertilizer posted the growth of 32.8 percent, Electronics 18.9 percent, Paper & Board 19.6 percent, Leather Products 12.9 percent, Coke & 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 that the credit to private sector also increased to Rs 231 billion as compared to Rs 53 billion during January Fiscal Year 2014 over January Fiscal Year 2013.
The Finance Minister said that the arrival of important crops such as cotton crop had posted a growth of 7.5 percent over last year as well, while other agriculture crops production were also likely to give comfort to growth targets.
Dilating on the external front, the Finance Minister said that exports were showing positive result at 3.2 percent over last year. The value added exports are taking place which will be further increased due to accessing GSP plus status, he added. Senator Ishaq Dar said that the imports increased by 3.9 percent higher than last year. The important thing is that import of machinery at 26 percent over last year is the 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 Balance of Payment (BOP) position and added that he was hopeful that there would be further improvement in BOP position and foreign exchange reserves on account of expected foreign inflows.
The important indicator which the Minister said the headline inflation which was measured by Consumer Price Index (CPI) had been contained to 7.9 percent in January 2014 as compared to 8.1 percent January 2013. Similarly Core inflation 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 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 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 Rs 167 Billion indicating an increase of 26 percent over the collection of January last year was a positive signal to achieving full year target.
The IMF mission Chief Mr. Jeffery Franks appreciated the efforts of the government and opined that macro-economic situation of Pakistan is favourable. The IMF views that the government of Pakistan is fully committed to the reform agenda, he added. Mr. Jeffery Franks appreciated the efforts of revenue collection by FBR and also other economic indicators of Pakistan’s economy which suggests that the economy is on track and its outlook is positive.