Rising inflation, interest rates remain a challenge, says PM advisor

• The economic position of the country has improved however, a number of challenges remain, says Dawood.
• Dawood said that the government is working on improving crop yield and increase exports.

Despite a surplus in current account and stability in Pakistani rupee, inflation and interest rates remain high, admitted Advisor to Prime Minister on Commerce Abdul Razzak Dawood on Saturday.

“The economic position of the country has improved however, a number of challenges remain,” said Dawood, while talking at the Pakistan Edible Oil Conference. He said that a strict monetary policy was implemented in light of the economic situation.

The advisor further said that overcoming unemployment and rising inflation were the government’s top priorities. He said that special attention is being paid to the value addition sector.

Dawood said that the government is working on improving crop yield and increase exports. “There are more challenges in the agricultural sector as compared to industrial sector,” he said.

The World Bank projected growth in Pakistan to languish at 3 percent or less through 2020, as macroeconomic stabilization efforts weigh on activity. The World Bank in its latest Global Economic Prospects report, said that growth in Pakistan decelerated to an estimated 3.3 percent in FY2018/19, reflecting a broad-based weakening in domestic demand.

“Significant depreciation of the Pakistani rupee (the nominal effective exchange rate depreciated about 20 percent over the past year) resulted in inflationary pressures (SBP 2019). Monetary policy tightening in response to elevated inflation restricted access to credit. The government retrenched, curtailing public investment, to deal with large twin deficits and low international reserves," stated the report.