ISLAMABAD: Adviser on Finance Abdul Hafeez Shaikh on Saturday said the difficult decisions taken by the government have started bearing positive results on the economic front.
Addressing a news conference along with FBR Chairman Shabbar Zaidi about the economic situation of the country, the finance adviser said the government has overcome the fiscal and trade deficits. He said economic reforms have gradually started bearing results and all the macro-economic indicators showed resilience during the first quarter of current financial year
He said the current account deficit witnessed a decrease of 35 percent as it reduced from $9 billion to $5.7 billion during the first quarter of current fiscal year. The fiscal deficit shrank by 36 percent due to the steps taken by the government and came down from Rs 738 million to Rs 436 billion, he added.
Hafeez Shaikh said the current account deficit has been reduced to the record level as Pakistan struck agreements with friendly countries as well as IMF, World Bank and the Asian Development Bank.
He said exchange rate and foreign reserves are standing at strong levels with 16 percent surge has been made in revenues. He said 800,000 additional people have come in the tax net. He further said the confidence of foreign investors is also increasing in Pakistan, and there has been an additional $340 million net portfolio investment.
The adviser said the government has not made any borrowing from the State Bank of Pakistan over the last three months with the aim to control inflation, adding they have also not taken supplementary grants as there is check on expenditures.
Non-tax revenue rises
Hafeez Sheikh said the non-tax revenue has contributed Rs406 billion in the first quarter of current fiscal year which is 140 percent more than the last corresponding period. He expressed confidence that the government will be able to raise Rs1600 billion through non-tax revenue this fiscal year.
The adviser pointed out that exports remained stagnant over the last five years. However, the exports are now increasing as a result of support given to industries in the form of subsidy on gas, electricity and loans.
The finance adviser said that the government has also focused on overseas employment of Pakistanis to increase remittances. He said 224,000 people went abroad last year for employment whilst this year this number has surged to 373,000.
He said that international financial institutions including the IMF and World Bank are also giving positive statements about Pakistan’s economy, adding that the present government has significantly reduced expenditures.
Pakistan at FATF
Responding to a question, the adviser said the government will unveil a comprehensive policy regarding Small and Medium Enterprises (SME) within two weeks. He said the policy will contain proposals of financing SMEs, incentives, ease of doing business and speedy approvals.
The adviser said government agencies are working in unison to ensure that Pakistan comes out of FATF grey list at the earliest. He said it is in Pakistan’s own interest to check money laundering, and steps are being taken in various directions for the purpose, while so far over 20 of the total 27 points have been implemented.
Hafeez Sheikh said public welfare is the cornerstone of the economic policy of the government. He said the government has not increased petroleum prices for three months as the rupee has stabilised.
Responding to a question, FBR Chairman Shabbar Zaidi said dialogue with trader community is progressing positively and there is no deadlock in it. He said that Pakistan has discussed with UAE authorities the misuse of Iqama permits by Pakistanis. He said the UAE government has agreed to provide details of Pakistanis’ properties there.
