KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan on Friday said that the government is about to announce the agreement with the International Monetary Fund (IMF) for next review.
Speaking at the Pakistan Banking Award 2021 ceremony organized by the Institute of Bankers Pakistan (IBP) in collaboration with Dawn Media Group and A.F Ferguson & Co at a hotel here, Governor said that the government of Pakistan and advisor finance (Shaukat Tarin) had said clearly that they were about to announce the agreement with the IMF for next review.
“It is not about the money, we see the journey ahead in partnership with the IMF and it is also the fact that we have confidence in the direction of our policies,” he said.
He said that the country had witnessed 4% growth in FY 21 and now the government was targeting 5% for ongoing fiscal year, which he described as a welcome challenge.
He said it would be a formidable task to achieve the higher economic growth rate as the country had witnessed sluggish growth during the past two years. However, the government and the central bank are ready to take all measures to support economic growth without compromising the external economy, he maintained.
“Today we have a welcome challenge to attain 5 per cent growth that we wanted to have because growth has actually been slowing during Covid-19,” he said, adding that they were determined to take all measures that were necessary to ensure that growth remains sustainable.
He said partnership with friends of Pakistan would continue to support the country’s external economy and added that the Saudi government had recently announced depositing $3 billion with the SBP and providing another $1.2 billion financing for energy imports after Prime Minister Imran Khan visited the kingdom.
“These support from friendly countries are the measures that over and above the IMF engagement are going to further support our external development,” he said. Pakistan’s economy has performed much better than anticipated by International Monetary Fund (IMF) last year. The IMF had projected 3 percent GDP growth, current account deficit at 1.7 % of GDP, foreign exchange reserves at US$14.5 billion and external debt at 32 percent for FY21.
Contrary to the IMF projections, the country’s has witnessed a 4 percent GDP growth, 0.6 percent current account deficit, US$ 17.4 foreign exchange reserves and 28.5 percent external debt, which was much better as compared to the IMF projections. He said that the country had received $29 billion remittances, showing a 27 percent growth.
The market based rupee-dollar exchange rate mechanism has continued to ensure achieving a sustainable external economy and it would continue to do so. “The average exchange rate stands at Rs.160.2 against the US dollar in the current calendar year to date as compared to Rs.162 in the same period last year,” he said.
He said the central bank injected Rs2 trillion (5% of GDP) through different measures including proving subsidized loans for industrialization, lent to corporate for paying salaries and rescheduled corporates’ and households’ loans to support economic growth during Covid-19. Mansoor ur Rehman Khan, CEO, IBP; Saleem Raza & former governor SBP also spoke in the event. Meanwhile, CEO Dawn media group Hameed Haroon gave his video message.
Later, Habib Bank Limited (HBL) was given best bank 2021 award while Khushali MicroFinance bank, HBL, NBP, UBL, Bank AlFalah and Pakistan MicroFinance Investment Company have been awarded Best MicroFinance award, Bank for Small and Medium Businesses, Best Bank for Agriculture, Best Digital Banking, Best Customer Franchise and Best Contribution non-bank entity, respectively.
Copyright Business Recorder, 2021