Caretaker Finance Minister Dr Shamshad Akhtar has said that the Pakistan economy is expected to grow by 2-2.5% in the ongoing fiscal year.
“Despite challenges, there has been significant progress in macroeconomic, exchange rate and financial stability. Growth is to rebound into the positive trajectory in the range of 2-2.5%, with agriculture expected to grow by 5.6%, and industry by 2.5% this fiscal year,” she said.
The projections were made during Dr Akhtar’s keynote address via video link at the IPO Summit-2024, being held in Karachi.
She said that despite the Federal Board of Revenue (FBR) “struggles to launch additional reforms”, the tax collection target is projected to touch Rs10 trillion.
The interim minister said that owing to the adoption of austerity measures, the government has managed to generate a primary surplus and the “substantial deficit on the current account itself has turned to a surplus thus far”.
“Until and unless you have two of these accounts manageable, the fiscal and current account, we will not be able to reduce the interest rates,” she said.
Dr Akhtar noted that capital markets cannot thrive under “very high-interest rates”.
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On the external front, the caretaker minister said that the FX reserves have reached $9.1b due to the International Monetary Fund (IMF) tranche and multilateral flows.
“With the realization of quick disbursement of multilateral flows from World Bank, Asian Development Bank, AIIB, which have also been enhanced by the International Monetary Fund (IMF) release of the second tranche, the foreign exchange reserves have reached $9.1 billion from the lows of $4 billion at the beginning of our term,” she said.
She said foundations have been laid for attracting foreign investments, which will pay high dividends moving forward to the incoming governments.
“The economic recovery process has boosted business confidence and market sentiment,” said Dr Akhtar, citing indicators i.e. the recent bullish performance of the Pakistan Stock Exchange (PSX), and an increase in foreign portfolio inflows.