A meeting of the Monetary and Fiscal Co-ordination Board was held here Tuesday with Finance Minister Hafeez Shaikh in the chair. Other members of the Board present in the meeting were deputy chairman, Planning Commission, the governor SBP and the secretary finance.
The finance minister stated that the co-ordination board was an important institution for bringing consistencies in monetary, fiscal and exchange rate policies and its meetings were required to be held regularly to ensure that all economic managers were working on a shared set of objectives. He voiced concern that the meetings of the Board were not held as frequently as required and urged that in future these meetings must be held regularly as stipulated in the SBP Act, 1956.
The governor, SBP briefed the meeting on the recent developments on the monetary side. He pointed out broad money growth was recorded 9.3 percent as compared to 5.5 percent last year. Together with rising international commodity and oil prices, the inflationary pressure is persisting. The government borrowing has also been a factor even though borrowing from the SBP that had surged to a very high level of Rs 315 billion during December 2010 has been brought down significantly.
He cautioned that surging deficit should be brought down and reliance on the SBP borrowing be further reduced. More importantly, share of private sector in credit expansion needs to be increased to support investment requirements of the country. It was further stressed that foreign financing in the budget also required to be increased so that domestic resources can be freed up for private sector financing.
The finance secretary presented an overview of the economy and noted that revised growth target was 2.4 percent and next year growth has to be accelerated to make up for the lost growth due to floods and consequent slowdown in economic activities. He also noted that external sector had rendered extraordinary performance both on account of exports growth of 27 percent and remittances growth of 22 percent so far during the fiscal year.
Besides, strengthening the current account and the level of reserves, these developments had positive effect on exchange rate that remained stable throughout the year. On the budgetary outlook, it was pointed out that fiscal position has improved considerably from the first part of the fiscal year and significant adjustment will take place relative to the last year. The finance minister expressed the hope that the deliberations of the Board will lead to better economic co-ordination and that the challenges facing the economy will be coped with a co-ordinated manner by all institutions involved.-PR
Comments
Comments are closed.