Country records 5% growth in GDP, 17% in revenue, says Dar

The financially beleaguered Pakistan Muslim League-Nawaz (PML-N) has claimed that the country has recorded at least five per cent growth in Gross Domestic Product (GDP) during the first quarter of this financial year and 17 per cent jump in revenue collection during July to November showing the “positive outcomes of the economic policies of the government”.

During a press conference on Wednesday, Finance Minister Ishaq Dar said that the present government had successfully made a revenue collection of Rs 792 billion during the past five months against Rs 679 billion recorded in the same period last year – an increase of at least 17 percent. Besides, the fiscal deficit, which was recorded at Rs 690 billion during the period under the previous government, has been reduced to Rs 570 billion with the reduction of 2.2 percent. Remittances have also shown a growth of 7 percent during past five months making the figure to $6.4 billion against previously recorded $ 5.9 billion during the same period.

Talking about foreign reserves which have depleted to over $3 billion, enough for only one month’s imports, the minister said that it was not a cause of concern for the government as it was expecting it. “The government has already stepped up efforts to jack up the reserves position to a reasonable level. We have policies and roadmap to bring the foreign exchange reserves to at least $20 billion in the next three years,” he said.

Explaining how the depleted reserves figure would be pushed to the claimed level, Dar said that his government will receive $800 million from Etisalat by the end of the current month, with another $790 million from the Coalition Support Fund from US by January 15, 2014. Besides, at least $1.5 to 2 billion would be received against the auction of spectrum licence which is expected to be held in February 2014. Further, the government has received $137 million from the Islamic Development Bank.

He said that inflation in the country was mainly because of the few bold steps taken by this government to resolve longstanding issues like circular debt. Through this move the government has saved at least Rs 70 billion in terms of interest. He criticised the caretaker government that despite changes made in 18th amendment of constitution, it had not cleared the accounts for the new government.

Dar said that the devaluation of rupee was mainly because of speculation and government has taken steps to discourage speculators which was evident from the fact that the inter-bank rate on Wednesday was closed at Rs107 to a dollar. He hoped that the figure would further come down.

According to him, the situation of inflows will further improve and those who speculate on Pakistani currency would end up as losers. The government, encouraged by positive outlook projected by “Standard and Poor” ‘Moodys’, planned to float a global rupee bond with the assistance of IFC who are also interested in floating of sovereign bonds of Pakistan which has received a very positive response from the market.

He rejected reports that the government has borrowed enough money from central bank to clear dues, saying except the already mentioned Rs 59 billion, no additional borrowing was made.