Economy looking up despite challenges

ISLAMABAD: Pakistan's economy is gradually moving towards sustained stability despite several internal and external challenges, economic indicators suggest.

The country's foreign exchange reserves continue to remain over $17 billion while other economic indicators are also moving in a positive direction towards economic progress.

Pakistan's foreign exchange reserves hit a record high of $17.956 billion during the week that ended March 26, which had fallen to $6.59 billion in November, 2008.

"Remittances sent by overseas Pakistan have been a considerable contributing factor in keeping foreign exchange reserves moving forward," sources said adding that remittances have shown record growth this year.

Overseas Pakistanis remitted $1.03 billion in April 2011, the second consecutive month that the figure has crossed the $1 billion mark, according to the State Bank of Pakistan (SBP).

Remittances sent home by expatriate Pakistanis have already crossed the $9 billion target set for FY11 as they reached $9.05 billion in the first 10 months (July-April), showing an increase of $1.74 billion or 23.81 percent compared with $7.31 billion received in the same period last year.

"Increase in the remittance shows the confidence of overseas Pakistan over the existing governing system of the country," remarked an expert while terming the continuous increase in remittances a positive sign.

On the other hand the country's exports crossed the $20 billion mark in July-April (2010-11), registering a growth of 27.78 percent over the exports of $15.773 billion during the same period of last year.

Overall trade deficit has shown a negative growth of 1.94 percent, according to the Federal Bureau of Statistics (FBS).

The industrial production also increased by 1.71 percent during July-March (2010-11) despite the challenges of energy shortage.

The agriculture sector has also been contributing towards the overall economic development and a bumper wheat crop of over 24 million is expected this year against the consumption of 22 million tons, according to Ministry of Food and Agriculture sources.

The surplus wheat could be exported against foreign exchange to help boost the economy.

The government has been focusing on a new strategy with an aim to raise the growth above its historical level, sources in the finance ministry said adding the main argument in the new growth framework is that growth should be market-led and not government led.

"Private sector should be the main driver of growth with public sector ensuring timely implementation of market reforms to promote competitiveness," sources added.