State Bank for accelerating domestic investment
Governor, State Bank of Pakistan, Ashraf Mahmood Wathra on Monday said it is opportune time to accelerate domestic investment in the country to take it to the next level of robust high growth. Investment be made in new projects.
As a key note speaker at a media briefing on the economy of country, SBP Governor linked his assertion/theory to the historically low interest rates, marked improvement in security conditions and energy supplies, and launch of CPEC-related initiatives. A good number of members of Pakistan Stock Exchange (PSX), investors, brokerage house representatives and banks' presidents/CEOs. Earlier, the Governor performed the traditional gong ceremony that symbolises opening of trading at PSX.
SBP Governor, citing a recent analysis of non-financial companies listed at the stock exchange, revealed that overall the corporate sector is fairly liquid and possesses a healthy surplus of investable funds.
He said Pakistan's economy had shown remarkable recovery during the last two fiscal years, growing by over 4 percent, after low rate of 2.8 percent on average in the preceding five years.
The macro-economic stability had been the key feature of this recovery with budget deficits being contained without compromising on indispensable public spending. The adequate level of foreign exchange buffers built up crossing dollars 20 billion for the first time, and inflation and inflationary expectations less likely to resurge anytime soon, he said. " What this tells us, is that no major risks are in sight, which would undermine efforts in meeting our shared objective of achieving high growth, generating more jobs and move further ahead on the development frontier," the Governor said. He termed the maturing of capital markets as a welcome sign for the private sector.
Showing his optimism, the Governor said that with the advent of unified PSX, now there was a deep liquidity pool and national platform for domestic savers and investors to take advantage of. For their part, corporate entities could benefit from enhanced access to savings, which can be channeled into new projects and developmental activities.
In addition, he said, the integration facilitates regulators in monitoring of market activity, and allows a greater degree of efficiency and transparency to be realized. State Bank of Pakistan's Chief Economic Adviser Dr. Saeed Ahmed in his presentation titled "Taking Economic Recovery to the Next Level: Role of the Private Sector" gave a detailed account of international perspective on the role of private sector and where the economy stood these days. He highlighted that it was right time to move from stabilization to growth and that it was the time for the private sector to lead economic recovery. According to the presentation, non-financial corporate sector data reveal gradual de-leveraging since the year 2009, and marked improvement in liquidity condition.
The most conservative estimate of net surplus with the corporate sector is Rs 446 billion. Some entities had parked their liquidity in treasury bills and Pakistan investment bonds.