KARACHI: Caretaker Finance Minister Dr Shamshad Akhtar has said that an “economic recovery plan” has been prepared, aiming at achieving sustainable growth led by the private sector, and approval of cabinet will be sought to operationalise the Export-Import Bank of Pakistan.
She was speaking to the members of the business community during her visit to the Korangi Association of Trade and Industry (KATI) here on Saturday. She was accompanied by the Chairman Federal Board of Revenue (FBR) Malik Amjad Zubair Tiwana and others.
Akhtar said that the objective of the economic recovery program is to achieve sustainable growth. She said the role of the private sector is imperative in this regard. She said small-scale industries can also play an important role in economic recovery. “The economic recovery program would also be uploaded on the website (of the finance ministry).
The Finance Minister said the first quarter of the International Monetary Fund’s (IMF) programme has been implemented, effectively. “FBR has collected more tax than the IMF target in the first quarter,” she mentioned, adding that the IMF delegation is coming to Pakistan on November 2, 2023, and they will be informed of the details about implementation of the programme.
She added that the IMF programme was on track, and the government was also taking other necessary measures to bring the country back on the right path. She mentioned that inflows from other multilateral institutions will also be received upon receipt of the IMF’s next tranche.
Shamshad explains govt’s commitment to economic development
Akhtar said that the country’s growth outlook has improved, mentioning that agriculture production has gained momentum that would help increase GDP by 2 to 3 percent. However, she admitted that industrial activity was still showing a sluggish trend.
On large-scale manufacturing, she added that for the first time in 14 months, the large-scale and power sectors had witnessed a growth. She said the production of cement and tractors has improved, fertiliser sales rebounded quickly, cotton production increased by 80%, and credit to farmers increased by 44% during the first quarter of this FY. She said that the Pak rupee has appreciated by 8% and the interbank dollar rate is stabilised at Rs 279.
She said law enforcement agencies played a great role in improving the value of the rupee as there were wrongdoings in the country on the borders regarding the currency, adding that reforms of exchange companies also played an important role in this respect. “Preventing the misuse of currency is the responsibility of all institutions, and a lot of work is being done to stop smuggling and illegal transactions,” she added.
Dr Shamshad said inflation was not controlled but it was seeing a downward trajectory, as Pakistan is an open economy and external influences are immediate, adding that the war in Ukraine had affected prices of oil and commodities.
The Finance Minister said the prices of electricity and gas have been adjusted according to the international market, and the immediate effects of the drop in oil prices were passed on to the masses. However, she said electricity theft is a big challenge for the economy.
On higher interest rates, she said that the interest rate is determined by the State Bank of Pakistan (SBP), and the results are coming in the form of improvements in the country’s current account. Sharing the government plans on the capital market, she said that reforms on the Pakistan Stock Exchange (PSX) have been made and their effects will also come out in the days to come.
She asked the business community to encourage everyone to take money from the stock exchange instead of the banks. “We are making it easier and cheaper for companies to raise money from the stock market”, she concluded.
Chairman FBR Malik Amjad Zubair Tiwana said work on reforms and restructuring in FBR is in progress, and measures are also being taken to broaden the tax base. “We are also working with other institutions, including NADRA,” he said, adding that agreements have been signed with foreign institutions on digitisation.
He informed that 1.2 million new taxpayers were added against the set target of 0.7 million.
Earlier, President Korangi Association of Trade and Industry (KATI) Faraz u Rehman presented a set of recommendations before the finance minister.
He urged that the shipping industry needs to be focused on as the sector has the potential to pay off the country’s debts. “Shipping industry ‘gulps’ the profit margins of exporters amid no monitoring,” Rehman added. He sought the government’s support and facilitations for cottage industry to streamline tax generation, adding that consensus should be made on the charter of economy.
He also called for the establishment of a help desk for registration of new drugs. He said the government is on the wrong path in terms of interest rate as the borrowing rate has nothing to do with inflation. Industrialist Zahid Saeed demanded streamlining of trade with Afghanistan, saying that the Pakistani rupee would further appreciate by Rs 20 if exports to the neighbouring country were done in USD instead of PKR.
Copyright Business Recorder, 2023