'State of economy'

This is apropos a Business Recorder editorial "State of economy". The editorial is incorrect in stating that the government is not serious in addressing the challenges.
It is important to see the challenges of external sector in the background of exogenous factors. The decline in exports are not only limited to Pakistan but global slow growth has impacted the external sector not only in the emerging economies but also the developed economies. It has to be noted that despite the challenges Pakistan economy did reasonably well at times when major economies of the world were facing much slower economic growth. The growth momentum rebounded after witnessing a muted performance and has been stabilized as growth persistently and continuously improved from 3.7 percent in FY 2012-13 to above 4 percent three years in a row with the highest of 5.3 percent in ten years in FY 2016-17.
The editorial has just mentioned that the World Economic Forum has ranked Pakistan at 115 position ignoring the improvement in GCC index from its early position at 122 as mentioned in the report.
The criticism with regard to IMF tacit support which the government enjoyed. is merely the editorial's own assessment which is incorrect. The IMF is an independent institution and they have their own assessment for every member country based on their research and do not blindly follow the facts and figures provided to them and are neither under any pressure nor under any influence. The principles and rules framed by the IMF are applicable universally. No specific rules/regulations are being adopted by IMF for Pakistan. The fact remains that ground realities are not changed through any own assumptions and opinions.
The editorial contends that the data has been manipulated which has been challenged by the credible industry sources. This contention is not supported with any data. The PBS is an independent agency and compiles the data from the government agencies which are then discussed in National Account Meeting represented by all stakeholders. It is also important to mention that that the present Government believes in complete transparency and has all along been sharing the data in the areas of economic growth, revenues, expenditures, budget deficit, and external accounts with its development partners and other financial institutions. All the data is regularly posted on their respective websites.
With regard to external and fiscal vulnerabilities, it is important to note that the Government of Pakistan is cognizant of these challenges and has taken a number of measures. The recent results show that exports and remittances during July-August FY 2018 have started to improve.
With regard to fiscal sector, it is to mention that fiscal deficit has been reduced from 8.2 percent in FY2012-13 to 5.8 percent in FY2016-17. The reduction in fiscal deficit during the past 4 years has been attained with a cautious mix of reduction in total expenditure and improvement in overall tax revenues and also as a percentage of GDP. Encouragingly, the fiscal deficit was contained despite higher development and security related expenditures and lower growth in tax revenues. Tax-to-GDP ratio has increased from 9.8 percent to 12.5 percent, Federal PSDP increased 3 times since FY2013, FBR Tax collection increased from Rs 1,946 billion in FY2013 to Rs 3,361 billion in FY2017, registering an overall growth of around 73 percent to Rs 3361 billion.
Better fiscal performance is a testament of effective implementation of comprehensive agenda of economic reforms. It clearly shows that the economy is performing reasonably well and consolidation efforts are on track. Furthermore, it has also helped in creating adequate fiscal space for development spending and social safety nets.
With regard to editorial's assertion that foreign financing may not be as forthcoming, is incorrect. The fact of the matter is that there is no such suspension of support from any international financial institution. It is evident from the fact that the Government of Pakistan and the World Bank continue to remain actively engaged on an ongoing basis on various projects and programs including policy based lending support within the framework of Country Partnership Strategy 2015-19 of the Bank.