For the first time, govt not borrowing from central bank: SBP governor addresses Harvard

• The number of tax payers have increased significantly, the SBP chief said.
• 'It takes time to stabilise the economy,' says Dr Hafeez Sheikh.
• Pakistan, for the first time in history the country, will export tractors to Africa and auto parts to Germany.

State Bank of Pakistan (SBP) Governor Reza Baqir has said that for the first time ever in history of Pakistan, the government is not borrowing from the central bank.

“For the first time, the Government of Pakistan is not borrowing from the State Bank,” revealed Governor SBP Raza Baqir, at Pakistan Development Forum 2019, held at the Harvard University. The SBP chief was seated alongside Adviser to Prime Minister of Pakistan Dr Hafeez Sheikh in the event co-hosted by Evidence for Policy Design EPoD and the Centre for Economic Research in Pakistan (CERP).

Speaking about the IMF bailout program, the central bank chief said that Pakistan is off to a good start, as the number of tax payers have increased significantly.

“We’ve embarked on a programme with the IMF. How is it different? The fiscal adjustment is off to a very good start. There is more to be done there but there is all the ground to be optimistic, such as the number of tax payers having grown significantly” said Baqir.

Baqir informed that Pakistan does very poorly on financial inclusion, especially on gender, where deposit ratios of women are lowest. He informed that Pakistan for the first time in history the country will export tractors to Africa, and auto parts to Germany.

Answering questions from the audience about Pakistan opening financial data, the SBP chief said that the central bank is working on gathering large survey data.

Speaking at the same event, Adviser to Prime Minister of Pakistan Hafeez Sheikh said that it takes time to stabilize the economy. “No growth spurt has lasted in the last four years... even if you’re working over time, it takes time to stabilise the economy” said Hafeez Sheikh.

About his government’s achievements, Sheikh informed that the circular debt was Rs38 billion rupees a month which has been brought down to Rs10 billion a month.

“Most important is to tackle domestic productivity - one of the things we are doing is trying to reduce government’s involvement in these crucial sectors. We are trying to build institutions and give them autonomy,” said Sheikh.

On Pakistan's relationship with China, Shiekh said the idea is not to be exclusively China-oriented as Pakistan is collaborating with Central Asian neighbors too. He added that China’s involvement in Pakistan is clear and defined and there is no sinister twist to it.