Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired a meeting of the Monetary and Fiscal Policies Coordination Board today.
Other members of the board present in the meeting were Adviser to the PM on Commerce and Investment, Deputy Chairman Planning Commission, Special Secretary Finance, Governor SBP, Dr. Waqar Masood Khan, and Dr. Asad Zaman. Chairman FBR also attended the meeting on special invitation.
Adviser Finance welcomed the participants and in his opening remarks stated that the mandate of this high-powered board is to review the overall economic situation and coordinate policy actions in an effective manner to achieve targets of key economic indicators.
Special Secretary Finance presented the current economic situation of the country and elaborated that the economy is on the path of recovery. He also highlighted various policy measures adopted to achieve high economic growth and job creation.
Governor SBP appreciated the efforts of the Ministry of Finance for making the technical committee design a joint macro-economic framework that will help in making effective monetary and fiscal policy being the prime objective of this forum.
He apprised that the policy rate has been kept unchanged at 7.0% due to improved business confidence and growth outlook. The current accommodative stance of monetary policy will support economic recovery. Inflationary pressure is also expected to ease in the coming months due to various policy and administrative measures of the Federal and Provincial governments.
Adviser for Commerce and Investment mentioned that exports were $3.6 billion while imports were $6.9 billion during the first two months of FY 20/21, which reduced the trade deficit. However, the performance of exports remained subdued in August due to the supply chain effect owing to unprecedented monsoon rains. He observed that the exports will register a sharp improvement in Sep 2020.
He said that the current account balance is in surplus, which will have a positive impact on the exchange rate stability of the currency.
Deputy Chairman Planning Commission apprised the meeting that coronavirus has affected the confidence of both consumers and investors. However, the Stimulus Package of the government and recent accommodative monetary policy is providing impetus to investment and growth.
Dr. Waqar Masood supported SBP Monetary policy stance and stated that its continuation will be helpful in economic recovery. Dr. Asad Zaman emphasized the need of generating employment through growth and appreciated the present Fiscal Stimulus Package of the government to enhance economic activities and employment opportunities.
Finance Adviser, Dr. Hafeez Shaikh emphasized the active role of this Board for designing policies to address economic challenges like inflation, stagnant exports, resource mobilization, etc. He also stressed the need for building the capacity of the Pakistan Bureau of Statistics for providing reliable data which will help in effective policymaking.
He also urged the role of public-private partnership which can help the government in resource mobilization and desired that PPP authority should come up with a comprehensive plan of resource mobilization for the socio-economic development of the country.
Dr. Hafeez Shaikh concluded that the government is committed to following macroeconomic fundamentals through effective policymaking and targeted reforms with an aim to achieve a sustainable and inclusive growth trajectory.