Pakistan will not be able to meet the GDP growth target of 5.5 per cent this year due to the decline in cotton exports, the State Bank of Pakistan Deputy Governor Riaz Riazuddin said on Monday.
He said that GDP growth rate this year is expected to be at around 4-5 per cent. Oil prices have gone down and will remain the same for some years. Pakistan’s economy has benefited due to low oil prices but at the same time Pakistani exports will suffer due to this. Oil-price crisis will have a major impact on the Middle Eastern countries’ economy and will indirectly affect Pakistan’s economy as the majority of foreign remittances of Pakistan come from the Middle Eastern countries.
Addressing a seminar on “Monetary Policy Challenges in Pakistan” organised by Applied Economics Research Center KU at AERC Auditorium, KU, on Monday, he said that the ultimate objective of the monetary policy of a country is to seek social and economic welfare of its citizens. Monetary policy of Pakistan is now devised by an autonomous body i.e. Statutory Monetary Policy Committee consisting of economic experts and is free from all sorts of governmental influence. He said that growth rate increases with the increase in inflation but in some cases growth rate declines with the decline in inflation rate.
He said that the unemployment rate is high which needs to be curtailed by having higher GDP growth rate. He further observed that the perception that economies of the military regimes in Pakistan were better than the democratic government’s economies had no factual basis.
University of Karachi Faculty of Social Sciences Dean Prof. Dr Moonis Ahmar in his concluding address pointed out that the major reason of the economic uplift in the military regimes of Pakistan was the massive foreign aids in those regimes. Monitory policy of the country must be professionally designed, reviews on periodic basis and no interference from the government quarters must be ensured at all levels. He said that it was indeed commendable that the State Bank of Pakistan and the Statutory Monetary Policy Committee was now autonomous and free from governmental influence. The gap between imports and exports and tax to GDP ratio must be bridged in order to strengthen the economy, he added.
