The International Financial Institutions (IFIs) view with great appreciation Pakistan's macro-economic stability and attractive conditions for doing business, adviser to Prime Minister on Finance and Revenues Dr Salman Shah said.
Record inflows of foreign investment into Pakistan signify global investors' growing trust in the long-term strength of the country's economy, he said while briefing journalists about his meetings with officials of the World Bank, IMF and other financial institutions.
Shah, who is heading a delegation of economic managers at the annual spring meetings, described his interaction as very positive.
He said the International Finance Corporation officials told him that they see Pakistan as having best indicators for doing business in the South Asian region. They are also studying the reforms that have helped Pakistan facilitate doing business in the country.
On the state of the economy, the country is on course to recording a robust 7 percent growth this year while foreign exchange reserves will touch an unparalleled US dollars 15 billion mark. Strong foreign and portfolio investments are pouring in and will cross US dollars six billion for the first time. Exports have shown a 6.5 percent growth, a little below the target. The core inflation is down to 5.5 percent. Shah particularly highlighted the importance of foreign investment being widespread, taking place in several sectors of the economy including banking, finance, oil and gas, energy, telecommunication, manufacturing and construction.
Dr Shah, flanked by Dr Ashfaque Hassan Khan, Adviser Finance Ministry and Director General Debt Office.
Pakistan is poised to attract huge investments in the years ahead as fundamentals of the economy are strong, reforms are underway and new initiatives are being taken, he stated. He referred to Prime Minister's visit to China, during which Dr Shah said Pakistan would particularly stress interaction with the Chinese corporate sector.
About the current account deficit, he said it is manageable and has increased due to enormous economic activity which has seen rising oil and machinery imports to propel further growth. On the agrarian side, he said this year the country will be having a bumper crops of wheat, sugar cane as well as pulses. The wheat production will be 23 million tones, according to conservative estimates, he said and added this has been possible due to a combination of factors including wider usage of fertilisers, timely announcement of support price and good weather.
The adviser said senior IMF leaders the delegation met have commended Pakistan's debt profile and added that debt to GDP ratio is 53 percent, better than India, Egypt and Turkey and other economies in the category.
Pakistan, he stated, will reap demographic dividends as global investors not only eye its 160 million population market but also realise that about 100 million people are under the age of 25 years. The investors look at their economic life cycle and the government is committed to developing its tremendous human resources as well as putting in place requisite infrastructure for fast-paced development.
However, he said, every segment of the society owes a role in making Pakistan an attractive and congenial destination for investment. Regarding improvement in PIA, he said the government intends to revamp PIA and replace its fleet of old planes over a period of time and has devised a five-year plan to improve its efficiency. The PIA, he said, has potential to be a major airline as it has committed customers who prefer to fly it.
Dr Shah underlined the importance of power sector in sustaining higher economic growth in industrial and agricultural sectors and said water projects are the best as they provide both water and energy. He saw increasing prospects for investment in small hydel projects.
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