Govt’s endeavours set to turn economy around: Tarin

ISLAMABAD:

Minister for Finance Shaukat Tarin on Thursday said that the government’s endeavours in rectifying the past government’s wrong economic policies, which put the country’s economy on the verge of collapse, started yielding results as all the macroeconomic indicators were showing positive performance.

Addressing a seminar titled ‘Investment, Industrialisation, and Exports: Harmonising Sectoral Efforts for Growth’, the minister said a Gross Domestic Product (GDP) growth of 5.4 per cent last year was reflective of the government’s sincere work in bringing structural reforms in various sectors of the economy.

“Our current year’s economic growth will also touch the five per cent mark that depicts we are on the trajectory of sustainable growth,” he added.

Tarin said Pakistan had the potential of even higher growth as “we have a great strength (60%) of young population, a diversified landscape, and a large pool of non-resident Pakistanis sending remittances worth billions”.

He said the government had to face four major crises during its tenure including inheriting a huge current account deficit, Covid-19 pandemic, Afghanistan issue, and the international commodity price hike. However, he said despite all these challenges, the government managed to set the country’s economy on the path of growth.

The minister said at present the savings rate in Pakistan was only 14-15% and the tax-to-GDP ratio 10% which was not enough to achieve the sustainable growth target. “With current savings and tax rates, we cannot surpass the GDP growth rate by 4% and if we do, we will have to borrow more,” he added.

He said the government would have to respectively raise the savings and tax-to-GDP ratios up to 25% and 20%.

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The minister maintained that the government had introduced a coherent industrial policy to promote export-oriented manufacturing in the country.

Tarin said the gap between exports and imports was as high as $40 billion which must be reduced to a minimum in order to bring down the current account deficit.

He said production of major crops in the country that was stagnant for the last seven to eight years had not started increasing due to the government’s pro-farmer policies.

He said the government embarked upon promoting investment climate, ease of doing business, rationalisation of regulations and shifting towards digitalisation.

Meanwhile, Minister for Industries Makhdoom Khusro Bakhtiar said the government was providing tariff protection and tax incentives, especially to the foreign investors to increase foreign direct investment that subsequently led to an increase in the country’s exports.

He said due to the government’s vision of import substitution, the manufacturing of mobile phones had surged in the country saving billions of dollars in foreign exchange reserves.

He said the government was also working on a balanced nutrient fertiliser policy to ensure food security in the country.

Adviser to Prime Minister on Climate Change Malik Amin Aslam, Board of Investment Chairman Azfar Hassan, Deputy Chairman Planning Commission Jehanzeb Khan and representatives of the UK High Commission also spoke on the occasion.

(With input from app)