Economy showing signs of recovery, says finance minister

ISLAMABAD (HRNW) Caretaker Federal Minister for Finance Dr Shamshad Akhtar said on Friday the country’s economy was showing signs of recovery owing to the efforts made by the interim government.

“If you view the macroeconomic indicators, you may find some betterment. There are some signs of economic recovery. Even if it is just starting,” the minister said while addressing a press conference here.

While deliberating upon the indicators showing positive development, the finance minister said the Consumer Price Index (CPI) had shortly declined from over 38 per cent in May to 27.2 per cent now (in September), adding that this was an important indicator to show betterment.

Dr Akhtar, who also holds the portfolio for Revenue, Economic Affairs and Privatisation, stated, “The caretaker setup inherited several challenges and tried to deal with them one by one. Our strategy was to prudently manage these challenges, and make efforts to control the expenditures and enhance the revenues.”

She said the country had come out of some difficulties, and the situation would improve further as “we move forward”.

According to the minister, the production sectors witnessed betterment, including the agriculture, which is expected to yield good output in both minor and major crops that will have a positive impact on the economic growth prospectus of the country.

She said the industrial sector was also showing improvement, notably in the cement industry, and added that as soon as the activity would pick up gradually, the industrial sector would also grow.

About the services sector, the minister said it was a very vibrant sector and had been linked with every other sector.

“In addition, the State Bank of Pakistan (SBP) kept the interest rate stagnant that will also help improve situation by reducing cost of borrowing by the industry and help its revival,” added the finance minister, joined by Caretaker Minister for Information and Broadcasting Murtaza Solangi and Caretaker Minister for Energy, Power and Petroleum Muhammad Ali.

Dr Akhtar said the government had also held talks with donors, and expresed the hope that in addition to the normal flows from them, funding in some areas would be fast-tracked.

She said the government was expecting around $2 billion assistance on a fast-track basis, adding, “The Asian Development Bank (ADB) is expected to keep its funding under Revitalizing Informal Settlements and their Environments (RISE) on fast-track.”

The finance minister said the government was focusing on reforms of those sectors which were beneficial for people and would help build confidence of investors to attract Foreign Direct Investment (FDI). She said the government was working on different initiatives to improve the FDI and ensure self-sustaining growth.

For remittances, Dr Akhtar said, Rs80 billion had been allocated for the purpose of improving remittances through formal channels, adding that Rs20 billion out of this amount had been released to banks for this purpose.

She said the foreign exchange reserves position was also stable, adding that the Exchange Companies Reform and anti-smuggling operations help stabilised the rupee. “This stability came without any bank intervention,” she noted.

The minister said the export-import bank was also being operationalised, and added that there were many other initiatives which showed the government was making efforts to bring about a positive change.