Owing to tough economic reforms introduced by the government, twin deficits including current account and fiscal deficit have significantly reduced, imports increased where as exports decreased during first quarter of financial year 2019-20.
Addressing a press conference in Islamabad, Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh said that those economic reforms have gradually started bearing results and all the macro-economic indicators showed resilience during first quarter of current financial year.
In the presence of Federal Board of Revenue (FBR) Chairman Shabbar Zaidi and senior Ministry of Finance official, the adviser said that owing to these reforms, the current account deficit shrank by 35 percent as it came down from $9 billion to $5.7 billion in first quarter of 2019-20.
The fiscal deficit also witnessed 35 percent reduction in first-three months of the current financial year due to steps taken by the government and it also came down from Rs 738 million to Rs 436 billion, he said, adding the revenue collection had witnessed about 16 percent growth during the period under review.
Dr Abdul Hafeez Shaikh said that the government had not borrowed any money from the State Bank of Pakistan nor released any supplementary grant in order to ensure strict adherence of fiscal discipline. “We struck agreements with friendly countries as well as IMF, the World Bank and the Asian Development Bank,” he told journalists.
“Our exchange rate and foreign reserves are standing at strong levels with sixteen percent surge has been made in revenues,” the adviser said, adding that eight hundred thousand additional people have come to the tax net. He said that the non-tax revenue has contributed four hundred and six billion rupees in the first quarter of the current fiscal year.
Calling it a big achievement, he said that this is 140 percent more than the last corresponding period. He expressed confidence that the government will be able to raise 1600 billion rupees through non tax revenue this fiscal year. He also said that confidence of the foreign investors is also increasing on Pakistan.
The Adviser said that there has been an additional 340 million dollars net portfolio investment. He pointed out that exports remained stagnant over the last five years. However, he said that the exports are now increasing as a result of support given to the industries in the form of subsidy on gas, electricity and loans.
Dr Abdul Hafeez Shaikh said that the government has also focused on overseas employment of Pakistanis to increase remittances. He said that two hundred and twenty four thousand people went abroad last year for employment whilst this year this number has surged to three hundred and seventy three thousand.
He said that international financial institutions including IMF and the World Bank are also giving positive statements about Pakistan’s economy. He said that the government has significantly cut its expenditures. Answering a question, he said that the government will unveil a comprehensive policy regarding small and medium enterprises within two weeks.
He said that the policy will contain proposals of financing SMEs, incentives, ease of doing business and speedy approvals. To a question, the adviser said that the government agencies are working in union to ensure that Pakistan comes out of FATF list at the earliest. He said it is in Pakistan’s own interest to check money-laundering.
He said that the government has not increased petroleum products for three months as the rupee has stabilized. FBR Chairman Shabbar Zaidi said that dialogue with trade community is progressing positively and there is no deadlock in it. Pakistan has discussed with UAE authorities abuse of use of Iqama by Pakistanis, he said, adding that the UAE government has agreed to provide details of Pakistanis’ properties there.