The federal government is planning to set up a “Pakistan Infrastructure Bank” to finance private investors in development projects. The Bank will have a $1 billion paid-up capital for this purpose.
Finance Minister Ishaq Dar announced the news during a press briefing with Pakistani media. He was at a 5-day visit to the US to attend meetings with the IMF and the World Bank. Mr. Dar said,
Both the International Monetary Fund (IMF) and government will hold 20 percent stake each in the proposed Bank, while international organisations, such as International Finance Corporation, will have the remaining shares.
Pakistan Development Funds for Overseas Pakistanis
In addition, Pakistan Development Funds will also be launched in the near future. Overseas Pakistani citizens will be offered shares worth Rs. 100 billion in order to channelise their remittances. The funds will be listed on the Pakistan Stock Exchange later on. The Minister added,
After success of sukuk bonds, Pakistan Development Fund would be another attractive investment for overseas Pakistanis.
Solar Energy Prospects
The government is also consulting with the World Bank to introduce solar energy as a low-cost electricity generation alternative in Pakistan. The minister added that Pakistan has taken massive strides in financial and digital inclusion. He further said that the country was on the verge of bankruptcy back in 2014. Since then the situation has improved and the nation is likely to achieve a 5 percent annual GDP growth rate in the current fiscal year.
Mr. Dar said that the government and the World Bank agree on these projections.
World Bank and IMF’s Predictions
World Bank’s report is indicative of a positive trend for Pakistan. In its GDP forecast for Pakistan, 5.2 percent growth rate is expected for 2017, 5.5 percent in 2018 to 5.8 percent in 2019. The report cited improvements in agriculture, infrastructure, external demand, and energy.
The IMF, on the other hand, predicts the growth rate at 5 percent for 2017 and 5.2 percent in 2018 with improved infrastructure as being the reason.
Global credit rating agencies have upgraded Pakistan’s rating from negative to stable and from stable to positive in recent years, according to Mr. Dar. He said that the current economic situation is on course to get Pakistan into the G-20 countries by 2030.