Foreign reserves cross $17 bn mark: Dar

ISLAMABAD: Minister for Finance Senator Ishaq Dar on Friday congratulated the nation on achieving foreign exchange reserves of US$17.2 billion, showing a sign of the growing strength in the economy.
This is another promise fulfilled, Dar said in a statement issued. He added that as a sign of growing strength of the economy, the country’s foreign exchange reserves had crossed 17 billion dollars and currently stand at 17.2 billion dollars.
Dar said the government was keen to resolve all issues of investors so that they could support the government efforts to achieve higher growth and generate employment opportunities.The minister briefed the US investors and businessmen on the economic situation of Pakistan under the auspices of the US-Pakistan Business Council (USPBC) in Washington, DC.
Attracting the investment was one of the top priorities of the government as it was not possible to achieve a higher growth target without increasing the investment to GDP ratio in the economy, he added.
The finance minister also apprised the US investors of positive economic growth indicators and said that the growth rate that averaged around 3 percent in the five years of the previous government had risen by 4.14 percent last year and was projected to rise to 5.1 percent during the current fiscal year.
Inflation, he said, had averaged around 12 percent in the previous government and was brought down to 8.6 percent in 2013-14 and was now projected to decline further to about 5 percent in 2014 15, which will be the lowest in the last 10 years.
Low inflation will increase the purchasing power of the people which bodes well for investors, he remarked. The minister said the tax revenues were up in the first year of the incumbent government by 16.44 percent, rising from Rs.1,946 billion to Rs2,266 billion.
This strong performance, he said, has been punctuated during the current fiscal year with a revenue growth of 13 percent until end March compared to the last year despite a massive decline in oil prices that adversely affected the tax collections from the petroleum sector.
He said the government was determined to expand the tax base and will ban grant of tax exemption. The minister highlighted that reduction in inflation enabled the SBP to reduce the Discount Rate to 8 percent, which is the lowest in the last 10 years.
He further said that this will provide a golden opportunity to investors to undertake capital expenditure and expand the production capacity.In order to boost the private sector borrowing, the government has decided not to use the central bank’s credit for financing the budget deficit, which will reduce crowding out of private investment.
Dar said that it was a good news for investors that the SBP reserves were over US$11.8 billion while the commercial banks’ reserves were around US$5.1 billion. He expressed the confidence that the balance of payments position will improve further and the current account deficit will be brought to under 1% of GDP.
He said that the Pakistani diaspora had shown great confidence in the government economic policies which was evident from the remittances which had crossed US$17.24 billion in the last 12 months, showing an increase of 16 percent.
He said the exchange rate has depicted a remarkable stability and appreciation under the current government, which is a good omen for investors. Also the government was committed to implementing its privatisation agenda and in this regard the just concluded HBL divestment of $764 million was a feather in the government’s cap.
Dar said that Karachi Stock Exchange Index, which stood at 19,916 on 11 May 2013 the day the elections were held, has continuously scaled new heights and stood at 32,248 on 13 April, 2015 showing an increase of nearly 62 percent.
On the other hand, the market capitalisation increased from Rs5.0 trillion to Rs7.1 trillion for the same period, showing an increase of 42 percent while in dollar terms it increased from $51 billion to nearly $70 billion, showing an increase of 37 percent.
He further said that investors and businessmen should be encouraged by the recognition of the government’s achievements by independent institutions like the IMF, World Bank and ADB.Similarly, Moody’s has improved Pakistan’s rating outlook first from negative to stable and then more recently from stable to positive.
Moreover, Japan’s Trade Organisation, Peter O Neil, a British economist, and Morgan Stanley have all predicted that Pakistan will soon be one of the most significant economies in the world, he added.