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ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh has expressed concern over inflation, credibility of the data of the Pakistan Bureau of Statistics, and wondered how the unemployment number would be firmed up as no institution was working on it, and numbers quoted are nothing but heresy.

Sources said that during a meeting of the Monetary and Fiscal Policies Coordination Board (MFPCB) - presided over by adviser on finance on Thursday - Dr Shaikh inquired why inflation has not been reducing, and Governor State Bank of Pakistan (SBP) Dr Reza Baqir explained that there was no pressure from demand side.

The adviser directed that inflation should be disaggregated after the meeting was told that there were gaps on supply side.

An official added that there were contributors to inflation - monetary, administrative and imported inflation in the form of fuel prices - and the adviser wanted inflation to disaggregate to accurately know what factor was contributing how much to the inflation.

The adviser also wanted to know from where the unemployment numbers would come as no organ of the state had been working on it, and expressed dissatisfaction over the working of the Pakistan Bureau of Statistic (PBS) and wanted it to be more effective.

Dr Shaikh emphasized on active role of this board for designing policies to address economic challenges like inflation, stagnant exports, resource mobilization, etc.

He also stressed the need for building capacity of the Pakistan Bureau of Statistics for providing reliable data, which would help in effective policymaking.

The adviser also urged the role of public-private partnership, which could help the government in resource mobilisation, and desired that the PPP authority should come up with a comprehensive plan of resource mobilization for socio-economic development of the country.

Dr Shaikh concluded that the government was committed to following macroeconomic fundamentals through effective policymaking and targeted reforms with an aim to achieve sustainable and inclusive growth trajectory.

Earlier, the adviser finance welcomed the participants, and in his opening remarks stated that the mandate of this high-powered board is to review the overall economic situation, and coordinate policy actions in an effective manner to achieve desired targets of key economic indicators.

Special Secretary Finance presented the current economic situation of the country and elaborated that the economy was on path of recovery.

He also highlighted the various policy measures adopted to achieve high economic growth and job creation.

The governor SBP acknowledged the efforts of the Ministry of Finance for making Technical Committee to design joint macro-economic framework, which will help in making effective monetary and fiscal policy being the prime objective of this forum.

He apprised that the policy rate had been kept unchanged at seven percent due to improved business confidence and growth outlook.

The current accommodative stance of monetary policy will support economic recovery.

Inflationary pressure is also expected to ease out in the coming months due to various policy and administrative measures of the federal and provincial governments.

Adviser for Commerce and Investment mentioned that exports were $3.6 billion, while imports were $ 6.9 billion during the first two months of fiscal year 2020-2021, which reduced the trade deficit.

However, the performance of exports remained subdued in August due to the supply chain effect owing to unprecedented monsoon rains.

He observed that the exports would register sharp improvement in September 2020.

He said that current account balance was in surplus, which would have positive impact on the exchange rate stability of the currency.

Deputy Chairman Planning Commission apprised the meeting that coronavirus had affected the confidence of both consumers and investors.

However, the stimulus package of the government and the recent accommodative monetary policy are providing impetus to investment and growth.

Dr Waqar Masood supported the SBP monetary policy stance, and stated that its continuation will be helpful in economic recovery.

Dr Asad Zaman emphasized upon the need of generating employment through growth, and appreciated the present Fiscal Stimulus Package of the government to enhance economic activities and employment opportunities. Other members of the board present in the meeting. The chairman FBR also attended the meeting on special invitation.

Copyright Business Recorder, 2020