ISLAMABAD – Monetary and Fiscal Policies Coordination Board (MFPCB) hasnoted with satisfaction that the measures taken by the government forfiscal consolidation, external sector and monetary policy have set thedirection for positive improvements.
The meeting of the Board was held in Islamabad on Friday with FinanceMinister Asad Umar in the chair.
While reviewing fiscal policy, the Board noted that fiscal deficit for thefirst quarter of FY19 turned out to be 1.4 percent of GDP. The Boardappreciated the authorities’ adjustment plan for fiscal consolidation whoseimpact would be visible from the second quarter of the current financialyear.
It emphasized the need for continued effort to ensure revenue generationand expenditure controls. The meeting was told that the financing mix isexpected to record a substantial improvement as most of the externalfinancing would be realized from January next onwards, which will result inlesser reliance on banking sector borrowing.
The meeting was informed that in the first four months of current financialyear, non-oil imports witnessed a decline of 4% compared to high growth of25% over the same period last year. Remittances have recorded asubstantial growth in FY19, while exports have shown growth of 4%.
Read Top Stories
On the exchange rate front, the Board was of the view that the presentdevelopments are mainly explained by market demand-supply gap of dollarliquidity on the one hand and more underlying structural impediments on theother. Availability of deferred oil facilities and the recent decline inthe international oil prices is expected to reduce pressures in thePakistan foreign exchange market in the near-term.
On recent changes in monetary policy, the Board agreed that the stance isappropriate at current levels given the projections for inflation in FY19and FY20.
