Prudent economic policies leading country toward stability: Hafeez Aug 18, 2020
ISLAMABAD- Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh Tuesday said that despite internal and external challenges, the combined impact of various progressive economic indicators show that the country was moving forward, thanks to prudent government policies.
“These policies would continue and efforts would be made to stabilize their positive effects,” he said while addressing a press conference to commemorate two years performance of the incumbent government here.
The adviser was flanked by Federal Minister for Information and Broadcasting, Senator Shibli Faraz, Foreign Minister Shah Mahmood Qureshi, Federal Minister for Planning and Development Asad Umar, SAPM Dr Sania Nishtar, Minister for Industries Hammad Azhar.
The adviser said that the performance of various sectors of economy during the first month of the current fiscal year was encouraging and indicate prudent government policies as the exports witnessed positive growth of over 6 percent, cement sales increased by 33 percent while its exports climbed up by 66 percent.
Likewise, the petrol and diesel consumption increased 8 and 15 percent, fertilizer production enhanced 22 percent, motorcycle sale went up by 31 percent, tractor sale increased 31 percent and automobile sales were also up by 4 percent.
He said remittances witnessed historic growth and reached to 2.8 billion while the revenue collection during the month also increased to Rs300 billion, succeeding the target by 23 percent while the Pakistan Stock Exchange (PSX) index increased 47 percent.
He said that the incumbent government inherited economy in crisis situation as the current account deficit had reached to a historic level of $20 billion due to stagnation of exports for past five years.
Likewise the foreign exchange reserves had also depleted to half and the danger of default was looming on the country at a time when the country was already overburden by excessive borrowings by the past governments.
Hence, he said, the first priority of the government was to save the country from the impending default and resultantly the government took result-oriented decisions and had landmark agreement with International Monetary Fund (IMF) which encouraged other financial institutions like World Bank and Asian Development Bank and friendly country to engage with Pakistan and help it come out of the challenging situation.
This initiative helped in stabilizing and enhancing foreign exchange reserves and government was successful in repaying Rs5000 billion loans borrowed by past governments.
He said that in addition, incentives were given to enhance exports from the country and encourage investments in the country. And resultantly, the Current Account Deficit was reduced to $3 billion form $20 billion, which is historic performance.
On the other hand, the government took drastic measures and controlled its expenditures.
It reduced the expenditures of president and prime minister houses and freezed expenditures of army and civil government. He said that this was the best ever cost control system introduced and that too was initiated form top level instead of burdening low income people.
He said that the government did not borrow even a single penny form the State Bank of Pakistan (SBP) during the last two years, while no supplementary grants were provided.
Due to these measures, the country was successful in averting domestic as well as foreign threats while the tax system was improved, which helped revenues to grow by over 17 percent before the coronavirus outbreak, which unfortunately effected the peace of collection.
He said that when the COVID-19 hit the whole world, there were two immediate challenges faced by Pakistan. The first challenge was to save common people from its economic effects and another to protect businesses.
He said, the government accordingly announced Rs1240 billion relief package, with different components, the biggest one to transfer cash to common and vulnerable people, it was historic, adding Rs250 billion were disbursed among 16 million people without any discrimination and irrespective of geographic or political affiliation.
Secondly, the government ensured liquidity to the business community and helped them in many ways by offering soft loans, delaying their due loans, paying utility bills of SMes and also Rs280 billion earmarked for wheat procurement were utilized to ensure cash flows.
The adviser said, the neutral institutions of the world have been appreciative of the government policies. Moody’s Fitch Rating and IMF board have appreciated the Pakistan for this and resultantly there had been 188 percent increase in foreign investment, the Pakistan Stock Exchange witnessed 47 percent growth and was included among the best performing markets of the world by Bloomberg.
He said that common people of Pakistan were the top priority of the Prime Minister Imran Khan.
In addition, he added, Rs192 billion were provided for the development of erstwhile FATA areas, Rs50 billion were provided for subsidy on five basic food items through Utility Stores Corporation (USC) and Rs15 billion Ramzan Package was given to provide subsidy on 19 items while 72 percent people benefited from subsidies on electricity, 90 percent from gas subsidy and 100 percent tube-well users benefited from electricity subsidy
The people were passed on the benefit of depleting international oil prices while subsidy was given to fertilizer sector.
He said that unity was key to come to the expectation of people adding that the 1930’s dream of Allama Iqbal led to 1940 Pakistan Resolution and ultimately led to achievement of Independent country under the leadership of Quaid-i-Azam in 1947.
He said that this nation has got one more opportunity to emerge under the leadership of Imran Khan.