Federal Minister for Finance, Revenue and Economic Affair Senator Muhammad Ishaq Dar on Friday said that economic parameters have recorded significant improvement over the last three years and it is time to accelerate the growth momentum of the economy. He was addressing the presidents of the various banks in a meeting held at the State Bank of Pakistan, Karachi. He highlighted that the foreign exchange reserve position of the country has improved significantly over the last three years and appreciated the role of the SBP and banks in this improvement.
He mentioned further that going further reserves will improve further and by the end of the fiscal year may touch $23 billion.
“We are expecting another $1 billion from international financial institutions in the coming week,” he said.
Appreciating the contribution of home remittances, the minister lauded the role of banks in it. He disclosed that with respect to the reimbursement of the TT changes, the government will release Rs 3 billion from the budgeted allocation of 2015-16.
The finance minister said that it is the first time Pakistan will complete IMF Macro-economic Stabilisation Programme. Despite several hurdles, it is the first time in the history of Pakistan that the country has completed maximum reforms under the programme, he said. Adding further he said that Pakistan does not intend to go to another IMF programme.
While elaborating on the fiscal improvements, he said that the budgetary deficit has improved to 4.3% from 8.8% three years ago without compromising on the development budget. The process of fiscal consolidation continues to lower the deficit going forward.
“As a consequence the government’s borrowing requirements from the banking system have reduced creating space for the banks to lend to the private sector,” the finance minister remarked.
He urged the banks to take advantage of this space and increase credit to the private sector particularly to the SME and microfinance sectors as well as to the housing sector. To promote mortgage financing in the country, he stressed the importance of having foreclosure law and said that without such laws housing finance could not be promoted.
The minister lauded the SBP’s efforts in the financial sector. He said monetary policy has played a great role in achieving economic turnaround. Further, he said SBP efforts with regard to financial inclusion have earned international recognition.
Earlier, SBP Governor Ashraf Mahmood Wathra welcomed the Finance Minister. “We are grateful that you took time out of your busy schedule, as we all know that Dar sb has been shouldering various other responsibilities besides his own portfolio in recent times.”