ISLAMABAD: Khurram Shehzad, the advisor to the finance minister on economic and financial reforms, Saturday outlined several key policies and economic initiatives including curbing smuggling and managing the skyrocketing inflation in the country.
The data shared by the advisor to the media indicates that inflation is currently manageable, and the reduction in inflation is a positive development for the general public. To ensure affordable prices, the Finance Minister Muhammad Aurangzeb, who leads the Economic Coordination Committee (ECC), has implemented a system for the regular monitoring of prices for essential goods and commodities. According to data, the timely monitoring enables the government to take effective actions, making policies more impactful and beneficial for the masses.
The adviser said that the government has taken strict actions against the smuggled petroleum products; it is conducting thorough inspections of thousands of petrol stations and shutting down hundreds engaged in illegal trade. He noted that the crackdown has resulted in a historic growth in documented sales, thereby enhancing economic activity and boosting revenue.
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He said that the government is actively working to eliminate smuggled and illegal tobacco sales, especially within informal markets and bazaars. He said this initiative is expected to yield a beneficial impact on both the economy and public health.
Referring to a statement by State Bank of Pakistan (SBP) Governor that the remittances are expected to reach historic levels of $35 billion in FY25, with an average of $2.9 billion per month so far, the advisor noted that this substantial influx of foreign currency will enhance reserves, thereby offering a crucial uplift to the economy.
He further said the SBP is set to launch a new platform, InvestPak, allowing individuals and corporates to invest directly in government securities. By bypassing banks, investors can earn better returns, encouraging a culture of savings and investment in the economy, he added.
He said there has been a notable shift towards localisation of imported raw materials, with top FMCGs in Pakistan sourcing more materials locally. This import substitution has resulted in a significant reduction in imports, with volumes rising and only 35% of materials now sourced through imports.
This trend has contributed to stable forex reserves, currency stability, and overall external de-risking of the economy, he said, adding, “For instance, if 70% of the raw material was being sourced through imports earlier, it’s now down to around 35%. This import-substitution could be one of the key reasons why imports are not rising as such (4% in 5M) while exports have shown consistent growth (13% in 5M), resulting in better forex reserves, currency stability and overall external de-risking of the economy.”
Copyright Business Recorder, 2024
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