Tarin's target of achieving 6-7pc GDP growth not an easy task, says expert

As Shaukat Tarain assumes the charge of the country’s Finance and Revenue Minister, the banker major task is to put the economy on a path of growth, and has said a GDP growth target of 6-7 percent, which as per economic analyst believes that this will not be an easy task to achieve.

“This will not be an easy target to achieve,” said Najam Ali, CEO of Next Capital while talking to local media. “One of the reasons is that when you talk about achieving the growth you need macroeconomic stability, which exists to an extent. However, the high inflation rate is a major challenge which is due to some structural and governance issues that need to be resolved,” he said.

Shaukat Tarin, on Monday, assumed the charge of the Finance Ministry and received a detailed briefing from the Pakistan Bureau of Statistics (PBS) officials.

Najam was of the view that despite challenges, the government should target to achieve a 6pc to 7pc growth rate and utilize all the resources at its disposal especially low-interest rate (policy rate).

Apart from utilizing policy rate to generate economic stimulus, Najam said that the government faces a number of constraints when it comes to increasing in its spending, which are due to non-collection of taxes.

Najam also called for lowering corporate tax rate, to incentivize manufacturing and organized sector. “Our entire incentive structure of growth are misaligned, which needs to be reviewed by the government,” he said.

Talking about the circular debt issue in the energy sector, he said that this problem cannot be overcome by increasing prices alone as these are governance and structural issues.