Economic stabilization: Steps yielding positive results, says Shamshad

ISLAMABAD: Caretaker Minister for Finance Dr Shamshad Akhtar said on Friday the government’s steps to stabilize the economy are yielding positive results and the economy is performing well now.

Addressing a press conference along with Caretaker Minister for Power and Energy, Muhammad Ali, and Minister for Information and Broadcasting, Murtaza Solangi, she shared a brief of measures taken by the caretaker government to improve the country’s economic condition and their impact.

“There are some initial signs of economic recovery, though some of them are just beginning. Discussion with IMF to control expenditure is under way. However, no deduction has been made in funds of provinces,” she added.

Giving details of the prevailing economic condition, the Minister for Finance said the Consumer Price Index (CPI) has shown a major decline which proves that Pakistan has come out of the difficult position. She said the productive sector has also registered improvement while the services sector is vibrant.

“The Consumer Price Index (CPI) had shown a decline from May figures, down from 38 per cent to 27.3 percent which is an important indicator that we have started to come out of difficulty and there would be price stability going forward,” she continued.

Shamshad Akhtar said consultations with the donor agencies are underway, and expressed the hope that Pakistan will get immediate fast flow in some sectors besides normal flow of funds.

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The caretaker government had inherited a set of challenges after coming into power but it was not shying away and was dealing prudently by controlling expenditures and increasing revenues and the situation would improve this way, she said.

“We are making our best efforts for cumulative assistance from the World Bank up to $ 2 billion. We are also expecting to get dollar inflows from Asian Development Bank in time,” she added.

The Finance Minister further stated that position of Foreign Direct Investment (FDI) is also improving while the country’s reserves are stable now. She said ongoing anti-smuggling drive has also helped to stable dollar position in the county.

The government had spoken to international donors including the world Bank and the ADB and “we are trying to expedite cumulative assistance from the world Bank at $2 billion. The ADB would also fast track RISE programme disbursement,” she stated.

She further maintained that the caretaker government has inherited many economic challenges but efforts are on to resolve those challenges.

“We are cutting costs to meet economic challenges and increasing tax collection to increase revenue,” she said, adding that there is distortion in the taxation system which will be sorted out through reforms in the FBR.

She said that the government is formulating a strategy to increase agricultural production adding that State Bank did not allow interest rates to rise which will also help in reducing inflation.

Replying to a question, she said that foreign exchange reserves are stabilizing, and that reforms are being done in the operation of exchange companies. She said government has released Rs 20 billion out of Rs 80 billion to facilitate remittances.

With the operation of law enforcing agencies against dollar smuggling, exchange rate has also improved.

“No country in the world allows anyone to play with the exchange rate of its currency. The government is preventing dollars’ smuggling to keep exchange rate stable. Actions will be taken against such exchange companies which are doing illegal work,” Caretaker Finance Minister added.

Small Exchange Companies have been asked to merge with big companies.

The country’s productive sectors have shown improvement. In agriculture sector, the government hopes that results will be good, both in the major and minor crops and improved agriculture output would improve growth prospects.

Some people have been complaining about the difficulties being faced by industries and the data we reviewed showed there was some improvement. As activity is picking up, the situation of industries is improving and cement was one of them. The services sector is very vibrant at this stage and it has linkages with other sectors as well.

Copyright Business Recorder, 2023