Govt aims at economic growth, poverty alleviation: Dar
Minister for Finance Senator Muhammad Ishaq Dar Wednesday said that the government was taking steps to pursue the objectives of economic growth, employment generation and poverty alleviation.
Chairing a meeting of the Monetary and Fiscal Policies Coordination Board, the minister said that the government had fixed the target growth at 5.5 percent for fiscal year 2016. He said that due to better policies of the government 4.24 percent GDP growth was achieved in 2015 which was the highest growth during last seven years. The minister highlighted that Monetary and Fiscal Policies Coordination Board is an important body to meet on quarterly basis to review the current economic situation to bring consistencies in monetary, fiscal and exchange rate policies and among macro-economic targets of growth, inflation and fiscal, monetary and external accounts.
Early indicators of the commodity producing sector suggest that the economic growth is picking up modestly. The growth momentum in Large Scale Manufacturing (LSM) continued to remain strong duly supported by better energy supplies; lower commodity prices; and accommodative polices. The sector was able to record a growth of 4.12 percent during Jul-Jan FY 2016 compared to last year growth at 2.15 percent. The year on year growth in January 2016 recorded at 5.0 percent compared to 1.52 percent last year. Low prices of international commodities particularly oil and subdued monetary expansion along with contained budgetary borrowings from SBP coupled with better supply of commodities in the market despite rains and floods resulted in the decline of CPI inflation during July-Feb 2015-16 at 2.48 percent compared to 5.45 percent. The other inflation indica- tors such as food, non-food, core, SPI and WPI are also lower compared to last year.
The external sector is also stable. Current account had posted surplus of $157 million in February 2016 and during the period JulyFebruary, 2015-16 current account deficit narrowed to $1.859 billion compared to $1.947 billion last year on account of stable exchange rate, remarkable reserves and healthy growth of remittances despite high base effects of last year. Workers' remittances had surged by 6.1 percent to reach 12.714 billion in the first eight months compared to $11.986 billion of last year. The foreign exchange reserves which were at the lowest level in February, 2014 had been increased to $ 20.508 billion as on March 21, 2016. Pakistan's foreign exchange reserves were expected to increase more than $ 22 billion.
The Secretary Finance gave a detailed briefing on economy. The meeting was apprised that macroeconomic indicators continued to show positive growth.
LSM growth was picking up. The industry specific data shows that a number of sector performed well during July-January 2016, such as automobile grew by 31.42 percent fertilizers 14.60 percent, chemicals 11.44 percent, rubber products 9.83 percent, non-metallic mineral products 7.64 percent, pharmaceutical 6.65 percent, core and petroleum products 4.85 percent, food beverages 2.23 percent, textile 0.95 percent, cement dispatches had increased to above 16 percent.
The other positive development was the increase in growth of machinery import by 8 percent which show signs of development activities. Moreover, the electricity and gas supplies also increased by 6 and 4 percent, respectively, over last year. The credit to private sector had witnessed expansion of more than 100% during July to 4th March 2015-16 over last year.