Home »Statistics » ‘Spin doctors’ challenging government’s growth data: Dar

  • News Desk
  • May 26th, 2017
  • Comments Off on ‘Spin doctors’ challenging government’s growth data: Dar
Finance Minister Ishaq Dar on Thursday ruled out another International Monetary Fund (IMF) programme in coming years despite slippages on fiscal side and external accounts. Speaking at a news conference here at the launching ceremony of Pakistan Economic Survey 2016-17, he at last acknowledged slippage on fiscal deficit target by 0.4 percent from 3.8 per cent fixed for the current fiscal year and stated that "fiscal year would close at 4.2 percent." Dar said that "spin doctors" are challenging government data on growth.

Ishaq Dar also acknowledged a considerable increase in the current account deficit during July-April of the current fiscal year which stands at $7.3 billion against $2.5 billion for the same period of last fiscal year and stated that the "fiscal year would close at a $8.3 billion current account deficit."

He said he was very confident and positive that the country would not be in need of another IMF programme in 2019 as reforms have been completed. He said the government had to go to the IMF programme in 2013 because of repayment of loans. The minister stated there would be shortfall in both tax and non-tax revenue collection and added that Federal Board of Revenue (FBR) tax collection has been revised downward by Rs 100 billion to Rs 3,521 billion from targeted Rs 3,621 billion collection. He blamed less collection from petroleum products, zero rating to exporter and exemption in taxes on Prime Minister's Agriculture Package as responsible for lower tax collection of Rs 120 billion, Rs 30 billion and Rs 25 billion respectively for the current fiscal year.

The Federal Board of Revenue (FBR) has recently moved a note to the Ministry of Finance on refund payments, he said. The minister said that exports would be $21.76 billion, significantly lower to the target of $23 billion, and categorically ruled out that exchange rate has nothing to do with a decrease in exports. He was responding to a question that exporters complained that fiscal measures as well as refunds blocked by the FBR and exchange rate have been responsible for export slide. The minister also rejected assertions by some analysts that Pakistan's currency is overvalued by 20 percent. If anything, it is not (overvalued) more than 5 percent with the countries Pakistan is dealing with, he added.

The minister said that sales tax zero-rating to five export oriented sectors would continue. The government has not proposed measures to increase rates of indirect taxes in coming budget. "We are trying our level best for not increasing rates of indirect taxes. However, withholding tax rates would be increased on non-filers of income tax returns," he added.

Dar claimed that a decline in exports was not in terms of quantity; rather it was in terms of value due to low commodities prices in global market. However, he stated that exports are the area of concern and the government is focusing on it. About rise in imports, Dar said it was because of a 40 percent contribution of machinery imports, which is good for a growing economy. The minister continued that imports of the country have increased to $37.40 billion during the first ten months of the current fiscal year as compared to $33.44 billion during the same period of the last year. These are expected to close at $45.48 billion by the end of the current fiscal year.

The finance minister also claimed that there was improvement in total and external debt of the country when compared to 2013, with total debt decreasing to 59.3 percent from 60.2 per cent and net external debt, excluding foreign exchange reserves with State Bank of Pakistan, are lower from 2013 level because of a sizeable foreign exchange reserves with SBP.

He said the industrial sector contributed 21 per cent, agriculture 20 percent, and services 60 percent, to the GDP and agriculture growth remained 3.46 percent, services growth 5.98 per cent and industries' growth remained 5.02 percent. Dar said that 6 per cent growth target has been fixed for the next fiscal year and there is a positive trend of growth in industrial sector while Prime Minister's Kissan Package of Rs 341 billion has yielded a positive growth in agriculture sector.

The production of wheat crop would be 25.75 million tons as compared to 25.63 million tons last year with 10.6 million bales of cotton compared to 9.92 million bales last year and efforts are being made to further improve cotton production in order to domestically meet the demand of textile industry. Dar said the CPI inflation is well below the target due to monetary policy measures and other steps taken by the government.

He said remittances are expected to close at 19.5 percent this year showing a decline of 2.6 percent. He said Foreign Direct Investment has increased to $1.73 billion during the first ten months of this year as compared to $807 million for the same period of last fiscal year and is expected to reach $2.58 billion by the close of the fiscal year.

Dar said per capita income was $1,333 in 2013 which has increased to $1,629 and Pakistan Stock Market is the best performing market in Asia and it is the fifth largest in the world.

About the war on terror, the finance minister said it has cost the country $123.13 billion. He said the cost of war on terror is Rs 90-100 billion every year and the government has allocated same amount in the budget for the current fiscal year. The minister said that volume of the economy has crossed $300 billion and poverty is declining in the country. Dar said that overall economic growth remained 5.28 percent, which has been the highest in the last ten years.



the author

Top
Close
Close