Pak economy achieves bare minimum

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  • Pak achieved 4.2pc GDP growth, ‘highest in seven years’, however agriculture, industrial and services sectors’ growth remained below target
  • Loss to national economy due to ongoing war on terror during the last 14 years escalated to $107b
  • Per capita income increases from $1,383 to $1,513 while unemployment rate declines a little from last year’s 6.1pc

 

Addressing a press conference on country’s economic performance at the launch of Economic Survey of Pakistan 2014-15, Finance Minister Ishaq Dar on Thursday blamed the five-month-long sit-in by Pakistan Tehreek-e-Insaf (PTI) and flash floods in September last year for the poor economic performance during the current fiscal year.

The minister said that the overall economic performance was “satisfactory”. The government achieved 4.2 per cent GDP growth against the target of 5.1 per cent during the current financial year. The agriculture, industrial and services sectors’ growth remained below the official target. However, the minister claimed achieving the “highest GDP growth in the last seven fiscal years”.

“We have ordered a study to ascertain the causes of below satisfactory performance of large scale manufacturing (LSM) sector, which took a credit of Rs 162 billion in first 10 months of the current fiscal year as compared to Rs 371 billion. The study will determine its causes, including PTI’s dharna and instability in international commodity prices,” he said.

The loss to the national economy due to the ongoing war on terror during the last 14 years (2001-2015) has escalated to $ 107 billion. “In this year alone, our losses are of $4.5 billion as compared to $6.6 billion last year. The decline this year is mainly due to the Karachi and Zarb-e-Azb operations,” he added.

The finance minister said that the government was focused on economic growth but under the prevalent power and gas shortage, they could not project a higher GDP growth. “We are setting up 7,000 MW and 3,600 MW LNG-based power projects on a fast-track basis. They will be ready by December 2017,” he said.

Further speaking about the country’s economic performance, the finance minister said that it was below target but it was better than the performance of last year. The government had reduced its borrowing from State Bank of Pakistan (SBP) and it was further on the decline during the current fiscal. Moreover, M2 growth also declined which helped controlling inflation below 5 percent this year, he said.

On low exports, Dar said that exports in first 10 months had reached $20.18 billion as compared to the target of $27 billion. Quantity wise, the exports have increased but value-wise earnings have declined due to a fall in international commodity prices. He said the exchange rate was stable at Rs 101 and foreign exchange reserves have increased to $17 billion and will help boost exports in future.

The minister said that per capita income has increased from $1,383 to $1,513 while unemployment rate has declined a little from the last year’s 6.1 percent. Maintaining fiscal deficit was a challenge and the government will achieve this fiscal target of 5 percent, he added.

On the tax collection, Dar hoped Federal Board of Revenue (FBR) will achieve Rs 2,605 billion target by this fiscal end. He also eulogised the services of religious speaker, Tariq Jameel, hired by FBR to implant the “fear of God” in customs service officers to abstain from corruption.

When asked about government’s inaction on reports of money laundering charges against him and the former army chief, the minister said that the confessional statement from him was taken by six army generals under coercion and was rejected by the apex court of the country.”It had no evidence value and was rejected by the apex court. If one rupee corruption against me is proven I will resign and leave.”

Upon query on Karachi-based IT company Axact, Dar said that the issue of fake degrees was highlighted in the international media and steps taken by the law enforcement agencies were their duty. “Law enforcement agencies have to act on such allegations in the international media. It is their duty. We have not asked anybody.”