WASHINGTON: Pakistan is likely to record an economic growth of around 4 percent in the 2012-13 financial year, Finance Minister Abdul Hafeez Shaikh said Friday as he outlined some of the gains the country has made in reforming the economy amidst regional and global challenges.
Speaking at a Washington think tank, Dr. Shaikh, who is in Washington for meetings with senior American officials on advancing economic cooperation between the two countries, noted the importance of economic basis to the overall wide-ranging bilateral relationship.
Asked to comment on the IMF assessment of the Pakistani economy, released Thursday, Dr. Shaikh saw nothing new in it and said Islamabad and the financial institution will work together in assessing the state of ecoomy.
He underscored the government's recognition of the challenges and referred to its continued efforts towards improvement in areas including fiscal management and tax revenue collection.
Shaikh said he looks forward to discussing state of the economy with IMF officials in the upcoming days and appreciated the Fund's support for the country in the recent past.
Despite inheriting a bleak fiscal situation and being confronted with a mix of regional security challenges, natural disasters and global contraction, Pakistan has steadfastly followed its policies of austerity and key reforms.
These measures have helped arrest inflation rate which was spiraling around 25 percent a few years ago, spur growth and devolve greater share of development resources to provinces, the finance minister told the gathering at Carnegie Endowment for International Peace, which was moderated by senior Carnegie Associate Ashley Tellis.
Dr. Shaikh cited progress Islamabad has made doubling the tax revenues in the last four years and adherence to austerity measures. The political government took some difficult decisions to fix the problems, he said.
The GDP growth rate is picking up and we expect that to be in four plus range, he told the gathering of South Asian analysts and foreign policy experts.
At the same time, Dr. Shaikh said Pakistan has 'a lot of work to do' to put the economy on a path that satisfies development needs and raisesthe quality of life of its people.
"We are in a difficult neighborhood --- we are facing serious situation on our (Afghan) border (in terms of dealing with extremism)--- and we do suffer from negative perceptions --- and we are paying a cost of these factors on economy." he said.
Pakistan, he said, offers one of the best investment regimes in the world and the overwhelming majority of investors including Americans have been reaping handsome returns from their businesses in the country.
Dr. Shaikh appreciated the US economic partnership with Pakistan and said it would be vital to founding the bilateral relationship on long-term basis. He also applauded Washington's role in realizing European Union preferential program for Pakistani exports.
In the regional perspective, Hafeez Shaikh said Pakistan has improved trade relations with both Afghanistan and India as part of its commitment to regional economic integration.