Govt aims at eco­nomic growth, poverty al­le­vi­a­tion: Dar

The Pak Banker - - COMPANIES/BOSS -

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.

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