Economy shows early signs of turnaround: Baqir

Says increase in machinery import, growth in LSM output support economy

KARACHI: Pakistan’s economy has started showing preliminary signs of turnaround as it has entered the growth phase after achieving stability in the recent past, the State Bank of Pakistan (SBP) governor said on Thursday.

“We can say with confidence that we have put the worst behind us,” Reza Baqir said at the CEO Summit Asia 2020, organised by the CEO Club Pakistan and Management House, according to a statement.

Increase in the import of machinery, turnaround in the large-scale manufacturing (LSM) output last month and uptrend in sales of cement were the three major indicators supporting the notion that the economy had entered the growth phase, he said.

Pakistan recorded an increase in exports in recent times compared to negative growth in exports of several regional countries, which were considered export powerhouses, Baqir said. “Exports of the country grew 4.5% in the first half of current financial year,” he pointed out. In the same period, exports of India dropped 2.3%, Thailand 2.5%, Sri Lanka 3.6%, Indonesia 5%, Malaysia 6% and Bangladesh 7%, he added.

Baqir emphasised that the public sector had to do a lot to bring reforms in its work to support the growth of private sector, adding that the State Bank had to do much more for the growth of economy and exports.

“Businesses of the country hold a very bright future,” he remarked.

The governor said the central bank had adopted different strategies to increase women participation in economic growth and financial inclusion. “Only 15% adult female population has active bank accounts in Pakistan,” he said.

One of the strategies being used by the State Bank to increase women participation is to promote entrepreneurship among female population of the country. The central bank is promoting digitisation of the economy and has introduced policy measures to promote financial transactions and trade payments through electronic and digital means in the country.

The central bank is also working to launch a micropayment gateway. “Launching of this new platform will put Pakistan prominently on the map of countries having advanced systems of electronic and digital means of money transactions to do business,” Baqir said.

He said the State Bank had been actively supporting the growth of small and medium-sized enterprises (SMEs) for the sake of national economic growth. “The State Bank would make sure SMEs get financing from banks in the country.”

Joint Chiefs of Staff Committee former chairman General (Retd) Zubair Mahmood Hayat said Pakistan’s conduct had always improved whenever the country faced major challenges. “The strategic decisions taken by Pakistan caused an impact in the entire region.” He said United Nations Secretary-General António Guterres had praised the role of Pakistan in peacekeeping in the conflict regions of the world. “Pakistan is a country full of resources,” he remarked.

He said youth of the country had achieved major milestones by showcasing their outstanding talent and qualification on the international online platforms.

Hayat said industrial growth in the country would get a major boost with the development of the China-Pakistan Economic Corridor (CPEC).

He said GDP of the country could grow 3-5% with the inclusion of women in business and economic activities. Speaking on the occasion, Arif Habib Corporation Chairman and CEO Arif Habib said the situation in Pakistan had improved for investment.

“Investment in Pakistan’s market has always paid dividends to investors. Pakistan’s stock market has paid a return of up to 12% on investment by foreign investors,” he said.

Published in The Express Tribune, February 21^st, 2020.

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