The Federal Minister for Economic Affairs, Hammad Azhar, has said that the incumbent government’s economic policies have started bearing fruit. It has not only uplifted the ailing economy but also virtually put it on a path of growth as clearly shown by various economic indicators.
Addressing a press conference in Islamabad, he said that the economy has started picking up as economic indicators including investment inflows, foreign exchange reserves, revenue collection, current account balance, trade balance, ease of doing business, Public Sector Development Programme spending, Stock Exchange performance and inflation are showing positive developments.
Current Account Deficit
Giving a break-up of the performance of various economic indicators, he said that the current account deficit in terms of Dollar came down by 64% during the first quarter of the current fiscal year compared to a reduction by 32% during the corresponding period last year.
The fiscal deficit was reduced by 1.4% in the first quarter of the financial year 2019-20, whereas it witnessed about 0.4$ reduction on a year-on-year basis, said Azhar. He said that the primary budget in the first three months was in surplus by Rs. 285 billion.
Foreign Portfolio Investment
Meanwhile, the foreign portfolio investment, which was flowing out for the last three years, had grown by $350 million, equivalent to a growth of 13%.
Foreign Exchange Reserves
The minister said foreign exchange reserves, had constantly been reducing by $500 million per month since 2017, however, they were stable since January despite the fact that the government had made record payments for debt servicing amounting to around $10 billion.
On the revenue front, he said that the number of tax filers had increased by 55% as the domestic revenues had increased by 25% during the first quarter. The minister said that there had been a growth of 15% in overall revenues despite the fact that imports into the country were on a decreasing trend.
He added that the government had also achieved a 90% revenue collection target set for the first quarter after collecting Rs. 960 billion in taxes.
The minister said that circular debt, which had mounted to Rs. 1,200 billion from Rs. 450 billion, mainly during the previous government’s last couple of months, was now only witnessing a Rs. 12 billion per month increase. Previously, it had seen a Rs. 38 billion per month increase. He expressed confidence that the circular debt will be reduced to zero by December 2020.
He said that Pakistan’s currency is under pressure and inflation increased due to stabilizing measures taken by the State Bank of Pakistan (SBP).
Azhar said that measures were also being taken to check inflation, which had witnessed an increase due to currency value management.
He clarified that the inflation during the first 13 months of the PTI government was still low at an average of 8% compared to the previous governments of PPP and PML-N, during whose tenures it had gone as high as 21.5% and 8.4% respectively.
The minister said some food commodities had registered an increase in their prices due to seasonal effects and would be stabilized soon.
Ease of Doing Business
The minister pointed out that the country had also made a significant improvement in ease of doing business by moving up 28 points, adding that steps are being taken to further improve the score.
Pakistan Stock Exchange
He said that the stock market in the country had grown by 6,500 points since the government took over while the PSX index had surged by 1,500 points in the last three days. He said this was another sign of economic recovery and development.
While talking about exports, he told that garment exports had grown by 36%, rice by 52% and footwear by 54%, respectively, during the first quarter.