- Same script
SBP’s second quarterly report is proof enough, if any was needed, that hopes of the Bank exercising any sovereignty in the post-Dar era were misplaced. Once again the Bank praises achievements that look good only in isolation and mentions the real dangers to the economy only in passing – a line that the finance ministry usually takes, especially when so close to a budget and an election. It mentions higher growth, better exports, lower inflation, etc. But the growth will be higher than last year’s, not this year’s target, and let’s not forget last year too, like every year, was a missed target. Surely the Bank’s economists understand that this, really, is not quite a feather in the cap. Yet they sell it like an achievement.
And, sure, exports are likely to surpass the target of $23.1b and settle somewhere around $24.5b. But why not put that in perspective with the $54.3b (expected) imports against $48.8 (budgeted), and explain what does to the already highest-ever fiscal deficit? Also, the bit about the depreciation needs a lot more explaining. How, for example, has it contributed to exports so quickly? One would think that while the impact on exports will take its sweet time playing out, the effect on debt repayment is far more easily quantifiable. Why hasn’t that been mentioned, and what it will do to the economy?
Politicians are used to playing the inflation card – which largely depends on oil prices completely outside Pakistan’s sphere of influence – as some sort of policy achievement. But for the central bank to count lower prices in the list of policy positives is incomprehensible. Considering that it is a completely independent institution, and one tasked with presenting an honest analysis of the economy every quarter, it should have openly spelled out how the government has been unable to counter the many dangers to the economy, chief among them the deficit and very high debt repayment. The report, unfortunately, seems more like a finance ministry marketing manual than SBP analysis.