He further said that Pakistan''s economy was facing short-term headwinds in the context of rising external account deficit. He said the government had held back exchange rate for long but recently they allowed around 5 percent adjustments in rupee-dollar parity. Illangovan said, ''The rupee dollar-parity that is being held for the long time, the authorities led the rupee depreciation by 5 percent but more flexibility is needed to move towards the desired direction".
He further said that imports were rising and exports earning went up a bit but the current account deficit had largely remained on the higher side. The remittances also flattened, he said. The domestic revenue mobilization, he said, in terms of tax to GDP ratio stood at 12.4 percent which was still not adequate. "These headwinds will continue impacting Pakistan until adjustments were not made on economic front," he added. He said more co-ordination was needed among the Center and provinces on fiscal reforms.
He further said the government had not yet requested for budgetary support and policy credit related to natural disaster but it also required macroeconomic framework. When asked about his assessment about the possibility of seeking another IMF bailout package, he said in a lighter vein that there were conspiracies hatched by the donors to push the government towards an IMF programme.
"I would leave on the authorities what they wanted to do," he maintained. Pakistan did well in first three years of the government as the GDP growth went up but in last 12 months, the external problems had surfaced. "Let''s have one common approach and we should evolve political consensus," he added. He said that Pakistan''s population touched 207 million and it was projected that it might go up to 400 million by 2047.
If the population growth remained same, then the GDP per capita would stand at the existing level but if population growth was reduced to one percent and GDP growth touched 8 percent, then the per capita income could go up to $10,000 by 2047.
He said that next ten years were quite important for Pakistan to lay the foundation and the country could achieve turnaround after completing 100 years after becoming independent.