LAHORE: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday said that the government policies have started bringing a turnaround despite difficult economic situation, especially owing to the outbreak of coronavirus globally.
The current account has been in surplus for the last three consecutive months, standing at $792 million in Jul-Sep, which is a significant improvement from the deficit of $1,492 million of last year's same period. FPCCI President Mian Anjum Nisar in a statement suggested that promotion of industrial activities should now be the priority of the government as it would increase economic activity and create employment opportunities.
He expressed confidence in the government policies aimed at increasing exports, stating that as a result of its policies, the confidence of business community had been restored and consequently economic activities increased in the country. Despite challenges at internal and external fronts, the government's prudent strategy put the country's economy back on growth trajectory as indicated by many economic indicators.
The exports of textile commodities witnessed an increase of 2.92 percent during the first quarter of the current fiscal year compared to the corresponding period of last year whereas, on a year-on-year basis, exports grew 11.3 percent during September 2020 compared to the same month of last year, he said.
The current account deficit reduction coincided with signs of economic growth pick up, which is evident by uptick in automobiles, cement, steel, fertilizer at a time when non-oil imports are also picking up which is a clear sign of economic recovery, he added.
The prime reason for better balance of payment situation is a surprising growth in home remittances. The World Bank was estimating that remittances would decline in countries like Pakistan but the opposite happened in fact, as the 31 percent growth in the first quarter is the highest since Apr-Jun 2011.
He said the higher growth can be attributed to the Pakistan Remittances Initiative that has incentivized banking channels to attract remittances from formal channels.
Moreover, the current account surplus has also reduced the pressure on rupee which was earlier depreciating. The currency has appreciated by around 5 percent in the past couple of weeks to five-month high, which is good news for economy, he added.
Mian Anjum Nisar, quoting the SBP figures, said the Foreign Direct Investment (FDI) into the country also witnessed an increase of 39.9 percent during the first two months of the current fiscal year as compared to the corresponding period of last year. He stressed the need for extending further facilitation to the business community, especially the small and medium entrepreneurs, so they are encouraged and do not face any financial issues.
He asked the FBR to simplify the mechanism introduced for the payment of refunds, so that the small and medium industry should not feel any difficulty in receiving the outstanding amounts. He further said that the continuous progress on the development projects would accelerate the economic process, besides providing employment opportunities to the country's youth.
Copyright Business Recorder, 2020