The Adviser to Prime Minister on Finance, Revenue and Economic Affairs, Dr Miftah Ismail chaired the meeting of Monetary and Fiscal Policies Coordination Board on Friday. The meeting was also attended by the Deputy Chairman Panning Commission, Finance Secretary, Governor SBP, Acting Secretary Commerce and Dr Ishrat Husain, Director IBA Karachi/ex-Governor SBP.
The Adviser on the occasion said that the meeting provides an opportunity to review the current economic situation for bringing consistencies in monetary, fiscal and exchange rate policies and ensure consistency among macro-economic targets of growth, inflation, fiscal, monetary and external accounts. He added that Pakistan's economy was performing well despite some challenges and moving on the path of growth. Consistency in upward growth trajectory is a reflection of government's development-oriented policies.
Secretary Finance presented a detailed briefing on the economic and fiscal situation. He informed the meeting that agriculture, industrial and services sectors have picked up growth on the back of supportive growth oriented policies. Inflation has been contained at 3.8 percent during the first nine months of current year on account of effective monetary policy along with better supply of commodities. Large-Scale Manufacturing (LSM) also recorded an impressive growth of 6.3 percent during the first seven months of the current year. High demand of cement and better sugar production will further improve growth. It was also informed that Large Scale Manufacturing's sector like, electronics, iron and steel products, automobiles, non metallic mineral products, coke & petroleum products, paper & board, rubber products, engineering products, pharmaceuticals, food beverages & tobacco and textile are showing better performance.
Exports are continuously increasing and have registered a growth of 12.2 percent during first eight month of the current year as compared to a negative growth of 1.5 percent last year. Likewise, the increase in imports has been contained at 17 percent compared to 48 percent at the start of the current year on account of proactive measures. Remittances and FDI are also improving while FBR revenues showing better performance above 17 percent over last year's.
The Governor SBP apprised the meeting that broad money (M2) witnessed a cumulative growth of 2.9 percent during 01 July-23 Mar FY18 as compared to a growth of 4.7 percent in the same period of last year. The actual outcome of inflation is below expectations while external sector especially current account deficit is higher than expected. The impact of two episodes of exchange rate depreciation is likely to be seen in the coming months, which may improve the current account.
The meeting while expressing concern on current account deficit, called for effective management to bridge the gap. It was noted that exports are improving, imports have slowed down, while remittances and FDI are improving. The Board members deliberated on various measures to enhance foreign exchange inflows.
The Board underscored the need for increasing IT exports as well as enhancing measures to export food, vegetables, meat and in this connection ensure compliance of SPS obligations. The board also resolved to continue its work to have meaningful deliberations for a sustained and improved economy.-PR