LAHORE
The SBP annual report is a revelation for both policy makers and stakeholders calling for a fresh approach to policy formulation with a new implementation mechanism with avowed aim to regain macroeconomic stability within a year.
The LCCI leadership pointed out that the underlying structural weakness of the economy, as hinted by the State Bank of Pakistan, demands strict macroeconomic discipline and systematic reforms to adress the fragility of the economy.
It was also demanded that the government focus on improving productivity, strengthening public institutions and the implementation of social safety nets to protect vulnerable segments of the population. The devastation wrought by the recent floods in the country has been a massive setback for both the country and government.
The achievement of economic targets such as GDP, inflation restriction, reduction of the fiscal and trade deficit is impossible until a well chalked strategy is evolved in consultation with trade and industry representatives.
The LCCI office bearers highlighted the government’s botching of public sector reform and the looming threat of circular debt. The LCCI also called upon the government should to tackle the deteriorating security situation, a huge impediment in the way of investments.
The LCCI office-bearers renewed its request for action on the high markup rate and the pressing need for a reduction in the cost of doing business. Inflation is apparently untouched by the tight monetary regime. The SBP in its annual report projected that average CPI inflation would remain 13.5 to 14.5 percent, which clearly illustrates the utter failure of government monetary policy.
The post-flood scenario demanded prudent spending and policies on the federal and provincial governments and increased focus on decentralised governance. But when “even before the floods, there had been little change, on the ground, in the importance of the provincial government, despite a substantial tilt towards provinces in resource distribution under the NFC Award.”
