Economic indicators show previously ailing economy now on path of growth: Hammad Azhar – Business

Federal Minister of Economic Affairs, Hammad Azhar, said Tuesday that the PTI government had not only raised the economy in crisis, but had also virtually placed it on a path of growth, as several economic indicators clearly demonstrate.

At a press conference in Islamabad, he said that the economy had begun to recover as economic indicators that include investment inflows, foreign exchange reserves, revenue collection, current account balance, trade balance, ease of doing business, Program spending Development of the Public Sector, performance of the Stock Exchange and inflation showed positive developments.

By breaking down the performance of several economic indicators, he said that the current account deficit in dollars fell 64 percent during the first quarter of the current fiscal year compared to a 32 percent reduction during the corresponding period last year.

The fiscal deficit was reduced by 1.4 percent in the first quarter of the 2019-20 fiscal year, while witnessing a 0.4 percent reduction on an annual basis, Azhar said. He said that the primary budget in the first three months had a surplus of Rs285 billion.

Meanwhile, foreign portfolio investment, which flowed over the past three years, had grown by $ 350 million, equivalent to a 137 percent growth.

The minister said that foreign exchange reserves had been constantly reduced by $ 500 million per month since 2017, however, they have remained stable since January despite the fact that the government had made record payments for debt service for around $ 10 billion.

Regarding income, he said that the number of taxpayers had increased by 55 percent, as national income had increased by 25 percent during the first quarter. The minister said there had been a 15{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} growth in general revenues despite the fact that imports into the country were in a downward trend.

He said the government had also achieved a revenue collection target of 90pc set for the first quarter after collecting Rs960bn in taxes.

The minister said the circular debt, which had increased to Rs1.2bn from Rs450bn, mainly during the last months of the previous government, was now only witnessing an increase of Rs12bn per month. Previously, I had seen an increase of Rs38bn, per month. He expressed confidence that the accumulation of circular debt would be reduced to zero in December 2020.

Azhar said the country had also made a significant improvement in the ease of doing business by climbing 28 points, adding that measures were being taken to further improve the score.

He said the stock market in the country had grown by 6,500 points since the government took over, while the PSX index had increased by 1,500 points in the last three days. He said this was another sign of economic recovery and development.

While talking about exports, he said that clothing exports had grown by 36{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, rice by 52{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} and footwear by 54{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, respectively, during the first quarter.

He said that measures were also being taken to control inflation, which had witnessed an increase due to the management of the value of the currency.

He clarified that inflation during the first 13 months of the PTI government was still low at an average of 8pc compared to the previous PPP and PML-N governments, during which periods it had risen to 21.5pc and 8.4pc respectively.

The minister said that some food products had registered an increase in their prices due to seasonal effects and would stabilize soon.

He said the federal government, in close coordination with the provincial governments, was making a comprehensive mechanism to control prices. According to the mechanism, effective monitoring of fixed prices in the markets will be guaranteed.

Responding to a question, he said that the problems related to the Karkey company were resolved amicably after the heads of both countries played a constructive role in their resolution.