Pakistan is heading towards economic revival and stability due to viable economic reforms of the government and average GDP growth rate in first quarter of the current fiscal year has increased to 5 percent as compared to 2.9 percent in the same period of last year, Finance Minister Ishaq Dar stated while giving a policy statement in the absence of opposition in the National Assembly on Thursday.
Pakistan Tehreek-e-Insaf (PTI), Pakistan People's Party (PPP) and Awami National Party (ANP) continued their boycott of the National Assembly proceedings for the second consecutive day on Thursday and averred that the boycott would continue till Interior Minister Chaudhry Nisar Ali Khan tendered an apology for his controversial remarks. However, members of Muttahida Qaumi Movement (MQM) and Jamaat-i-Islami (JI) were present in the House.
The Finance Minister said that GDP growth in the first quarter for the agriculture sector was 2.5 percent, industrial sector 5.2 percent and services 5.7 percent. He said that a high industrial growth was mainly because of retirement of circular debt that helped add 1700 MW of electricity to the system and the industries got the power to run. He said that growth rate in industrial sector has increased 7 percent due to increased supply of electricity.
Dar said that PML-N government has achieved a two-third annual target of GDP growth in the first quarter of the current fiscal year. "If we maintain it then Insha'Allah we will bring the GDP up to 6 percent during the next four years," he said. He said the PML-N government had made a commitment to bring down budget deficit from 8.8 percent to 4 percent over the next five years. The government has been successful in bringing down the budget deficit from 8.8 percent to 8 percent and it is hoped that the budget deficit will further decline by the end of this fiscal year, the Finance Minister stated.
Dar said the government has paid 503 billion rupees to retire the circular debt; if this amount was not retired daily load shedding would have been between 16 to 18 hours as it was in the last months of the previous government. While giving details of the circular debt, Dar revealed that Rs 348 billion was paid in the first phase through issuing Rs 128 billion of Pakistan Investment Bonds‚ slashing expenditure by 135 billion rupees‚ 20 billion rupee dividends from public sector enterprises and 59 billion rupees cash was paid out of Federal Consolidated Fund. He said the government also recovered a total of Rs 138 billion from various government institutions.
The Minister said the country was paying a 14% interest on the circular debt and by retiring the debt‚ "we would be saving Rs 55 billion annually just on account of interest". Dar said that the Prime Minister's discretionary fund and Ministers' discretionary funds have been reduced to zero. He said the functioning of foreign missions has been thoroughly reviewed and two billion rupees would be saved through curtailing different expenditures.
The Finance Minister said that Pakistan is paying $3 billion in instalments to the IMF under the repayment scheduled for the 2008 Stand-By Arrangement while "we are receiving $2.2 billion" under the 6.4 billion dollar Extended Fund Facility. The government is adding $80 million to meet the instalment due to the IMF.
The Minister said that 17 percent new companies have registered during the last five months which shows the confidence of the business community in the government. He said similarly‚ the stock exchange has improved by 27 percent. Dar revealed that the Asian Development Bank would give $1.7 billion to Pakistan for Dado project and $700 million would be released in January 2014 for this project.
The Minister said that presently the foreign exchange reserves situation is not satisfactory but due to government measures over the next three years it will improve and reach 20 billion dollars. He said that IFC would extend a $500 million facility, $800 million would be released from Etisalat on account of PTCL privatisation and remittances have increased by 7 percent during the last seven months.
Clarifying different statements regarding printing of notes‚ Dar said that during the last five months Rs 672 billion new notes were printed while Rs 466 billion notes were deposited. Thus total net new currency circulation is 206 billion rupees. Dar stated that the government is currently working on a new Gas and Petroleum Exploration and Production Policy and it would be announced soon. Dar said a committee has been established to recommend measures for the development of Islamic banking in the country within one year.
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