ISLAMABAD: Finance Minister Dr Abdul Hafeez Sheikh on Wednesday said economic challenges continue to remain in the form of public sector organisations and the security situation that acts as an impediment towards attracting investment. The economic team headed by Finance Minister gave a briefing to Prime Minister Raja Pervez Ashraf on the state of economy.
The Finance Minister underlined the need for political stability for dealing with the economic challenges. The Prime Minister was briefed about the performance of key macroeconomic variables during the fiscal year 2011-12 and the forecast for the new fiscal year starting July 1, 2012.
Hafeez Sheikh briefed the Prime Minister about the strengths and weaknesses of the economy and stated that continuing growth in spite of adverse global situation was the major plus in the country's economic performance. Another area of positive performance was decline in inflation to 11 percent from 20 percent a year ago. The minister stated that performance of the Federal Board of Revenue (FBR) for revenue mobilisation was quite extraordinary in the current fiscal year and tax revenue has reached Rs 1800 billion so far, showing a growth of 23.4 percent over last year.
The Finance Minister said the high growth of remittances, which will cross $13 billion, is at an all-time high and would support balance of payment as well as keep the economy moving in the right direction. Hafeez Sheikh expressed optimism that exports are likely to register robust growth for the second consecutive year despite contraction in demand internationally.
He said maximum 100 percent utilisation of the Public Sector Development Programme (PSDP) has been achieved in the current fiscal year and Rs 300 billion has been released. He also claimed targeted subsidies to the poor through Benazir Income Support Programme (BISP) which he claimed has made significant achievements in reducing poverty.
Raja Pervez Ashraf highlighted the importance of sound economic management, continuing policy of fiscal austerity and the need to focus on completion of projects in a regionally balanced way while also making efforts to increase self-sufficiency and successful efforts for increased revenue collection. The Prime Minister emphasised that provinces also needed to enhance their revenue collections to fulfil the needs of people. The meeting was also attended by the Deputy Chairman Planning Commission, Secretary Planning Division, Finance Secretary, Chairman FBR and the senior official of the Economic Affairs Division.