ISLAMABAD The Ministry of Finance has said that the government inherited aneconomy with a major balance of payments crisis which led to high inflationand low growth, but immediate actions helped stabilize the economy andreduce the unsustainable fiscal and trade deficits, leading to therestoration of business confidence in Pakistan.
In a statement, the Finance Division said that the success of the measurestaken by the government to restore and improve the business confidence wasevident in the performance indicators which had significantly improved onmany fronts.
The statement said the improvement in the business environment can begauged by the fact that Moody’s Investors Services had upgraded Pakistan’soutlook from ‘negative’ to ‘stable’ in December 2019, reaffirming thecountry’s rating of B3, whereas, in June 2018, Moody’s had downgraded theoutlook to ‘negative’.
Similarly, Pakistan’s ranking in the Ease of Doing index had also moved upby 28 points (108/190) while the World Bank ranked Pakistan among the top10 reformers in 2019.
Likewise, Bloomberg reported that the Pakistan Stock Exchange was thetop-performing market in the world in the last three months. PSX benchmarkKSE 100-share Index gained 50% in dollar terms since August 2019.
The statement also mentioned the remittances which had increased by 3percent to $11.4 billion during the Jul-Dec period against $11 billion inthe corresponding period last year.
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Similarly, after 4 years of outflows, net portfolio investment had gone upto $1.4 billion during Jul-Dec FY20 while it was $330 million last year.Besides, FDI during Jul-Nov FY20 had increased by 78 percent to $850million compared to $477 million in the same period last year.
Among other indicators, exports had increased by 4 percent to $12.3 billionin the Jul-Dec 2019 period versus $11.9 billion in the same period lastyear. Imports had decreased by 21% to $22 billion in the Jul-Dec periodagainst $28 billion imports in the same period last year.Current Account Deficit during the Jul-Nov 2019 period had declined by 73%to $1.8 billion (1.6% of GDP) compared to $6.7 billion (5.3% GDP) in thesame period last year.
SBP’s foreign exchange reserves had increased to $11.5 billion in Dec 2019from $7.2 billion in June 2019. An increase in the reserves was recordedafter debt repayments of $5.3 billion in the Jul-Nov period, including $2.7billion in interest payments and $2.6 billion in repayment of maturing debt.
