Govt allocates additional funds for export, construction sectors to boost growth

"The axis of the government’s economic policy is to improve the export sector," Finance Minister Hafeez Shaikh’s adviser said Monday at his press conference announcing several decisions made by the country's leading leaders to boost construction and export activities.

"In this regard, we have decided to allocate Rs200 billion to subsidize the export sector. The government will lower interest rates for exporters and the difference will be paid by the government," he said.

"The Rs200bn will be offered as loans to exporters with discount rates," he said.

In addition, he said, an amount of Rs100bn was allocated for the credit line of the State Bank of Pakistan to further support exporters. The measure will help exporters improve production capacity, he added.

The adviser said that all decisions aimed at accelerating economic activity in the country.

He recalled that the government had announced the release of refunds worth Rs30bn in the form of promissory notes or bonds. He said that since the business community demanded cash refunds instead of bonds, the government had decided to cancel the bond scheme and instead provide cash to exporters to provide them with immediate liquidity.

He also said that the government had decided to increase the limit of sovereign guarantees by Rs 250 billion to withdraw the circular debt.

Summarizing his speech, he said that during the first four months of the current fiscal year, the country has begun to gain stability and that the International Monetary Fund (IMF) and other international monetary institutions have recognized the improvement in the country's economy.

He added that the government was doing everything possible to manage the economy without problems, but noted that the country's prosperity is linked to the dollar-rupee exchange rate. He said an influx of foreign funds into the country (in response to government policy) will bring an improvement in the quality of life of citizens.

The advisor also said that the government was trying to boost the economic growth rate and that he was confident that the government will reach its growth target for the year with a healthy margin.

Responding to a question about inflation, he said the government was focusing on reducing prices and that multiple instruments were being used to handle the problem.

Citing the recent example of the release of 650,000 tons of wheat, he said the government was trying to increase the supply where it was necessary to address exorbitant prices. He also highlighted the role of provincial governments in addressing the price premium. He said that smuggling was also fueling inflation and that the government was devising a policy to curb it.

"The government does not want to take any step that increases inflation," he said, adding that, in this regard, the government had stopped taking loans from the State Bank of Pakistan.

"This means that new currency notes are not being printed," he said, adding that not a single rupee has been printed during the last four months.

Speaking about the discount rate, he said that the government has nothing to do with it and that the SBP, an independent institution, decides the discount rates taking into account inflation, economic conditions and their impact on various segments of society .

The Federal Minister of Economic Affairs, Hammad Azhar, also answered the questions of the journalists. He said that since June, the country's foreign exchange reserves have increased by $ 1.2 billion, showing signs of stability.

& # 39; The development of the construction sector is essential to accelerate the economic growth of the country & # 39;

Shaikh also announced that the government had decided to allocate an additional 30 billion rupees to the Naya Pakistan Housing Project (NPHP).

"With this last assignment, we believe that houses with a total value of Rs300 billion can be built. The government will contribute Rs30bn as a subsidy," he said.

He said the government also decided to provide a special tax relief to all companies that support the project and participate in the activity.

Early in the day, Prime Minister Imran Khan had chaired a high-level meeting on the restoration and promotion of the construction sector in Islamabad, Pakistan Radio reported.

Addressing the participants of the meeting, the prime minister said that the development of the construction sector was essential to accelerate economic growth.

He stated that the promotion of the sector was the main priority of the government.

He noted that about 40 industries are associated with construction, which can grow and create job opportunities for young people.

The participants of the meeting discussed several suggestions on the provision of construction loans, uniform tax rates in the provinces and the improvement of the public-private partnership in the sector.

The prime minister also set up a committee to make applicable suggestions on various problems facing the construction sector, including provincial and federal taxes on loans.

The committee, headed by the president of the Housing Authority of Naya Pakistan, Anwar Ali Haider, will consist of the president of the FBR, the governor of SBP, the finance minister of Punjab and the provincial chief secretaries.

The committee has been ordered to present its recommendations to the prime minister in 24 hours on taxes, bank loans and other solutions to the problems facing the construction sector.