Business turnovers growing: Miftah

Advisor to Prime Minister on Finance Miftah Ismail said on Friday that state of Pakistan's economy is very good and "there is no issue" while increase in revenue indicates that business turnovers are increasing. Speaking at a media briefing a day after the International Monetary Fund (IMF) first post-program monitoring report that noted "continual erosion of macroeconomic resilience could put the outlook at risk," the advisor said, "There is no issue with the economy."
He added, "The state of economy is very good. This year 6 percent GDP growth rate, which will be the highest in the decade, is expected, inflation is below 4 percent and revenue collection is increasing." He, however, acknowledged some challenges to the current account deficit and budget deficit but stated that there has been turnaround in exports in recent months and decline in imports will narrow the trade deficit.
He added that increase in foreign direct investment and remittances in the coming years will help meet the country's external liabilities. He admitted increase in external debt payment but was hopeful that there will be growth in exports and foreign direct investment remittances in the coming years as well as privatization proceeds by the next government will help meet the external liabilities. "We have done the debt repayment planning for coming years," he added.
The advisor said that terming the increase in foreign exchange as "artificial" was unfair as stability in foreign exchange reserves was brought during the last five years after State Bank of Pakistan's (SBP) foreign exchange reserves increased to $15 billion while those of commercial banks increased to $6 billion. "
He said that there is political consensus on privatization and he was confident the next government will be able to undertake privatization of loss making entities. Miftah Ismail claimed that Pakistan foreign debt was decreased to 20.8 percent of the GDP from 21.4 percent during the last five years.
The advisor on finance declined to have committed with the IMF for increase in power and gas tariff and stated, "As we are not in IMF program, we don't have any such commitment with the Fund." He said this in response to a question if Pakistan has assured the IMF during the post-program monetary discussions that it will make an increase in electricity and gas tariff.
He said that circular debt issue will be resolved as soon as ECC decisions are notified and approval of over and above allocated expenditure on tariff differential will be taken from the Parliament through supplementary grants at the time when budget for the next fiscal year is approved. He said that in addition to Rs 80 billion, Finance Ministry will also provide two tranches of Rs 30 billion each from the allocated subsidy to power producers.
He said he was opposed to subsidizing fertilizer, wheat and sugar because there is no mechanism to know whether or not the benefits of subsidy reached farmers. The government will continue funding the BISP, he added.
Miftah Ismail said Pakistan Steel Mills should be privatized because it is continuously causing hemorrhage. He also defended the decision to cut off supply of gas to the PSM and stated it was continuously defaulting on a gas bill of Rs 500 million.