Pakistan budget promises pro-business policies

ISLAMABAD: Rising remittances and private investments have been supporting the country’s economic growth, and the federal government promises to unveil a more pro-business budget for fiscal year 2017. As the FY16 moves towards its close on June 30, international analysts and multilateral institutions are praising Sharif’s government and forecasting renewed and continued economic business and financial growth compared to the last government s five year rule.

World Bank’s latest country report said fast growing home remittances and rising investments under the China-Pakistan Economic Corridor (CPEC) have supported the country’s economic growth. However, growth remains below the 5.5 per cent target envisaged in Pakistan s annual plan and the South Asia average of 7.5 per cent.

Pakistan’s growth is expected to pick up to 4.5 per cent from 4.2 per cent, the report said.

It further added that like the rest of the region, Pakistan was benefiting from high remittances, CPEC investments, and from low prices of imported oil, which have reduced the trade deficit despite a notable decline in exports and increased consumption.

According to the report, the budget for FY17 would encourage people to invest in various industries.

The gross domestic product (GDP) was up at five per cent, leaving its former range of two to three per cent.

The economy particularly industrial output would rise further as the government was moving fast to add 10,000 megawatts of power to end the energy shortages.

It would add another 1,500MW by 2025. The investment to GDP ratio would be raised further to 21.1 per cent in FY18. The size of the economy or GDP would be raised from the current Rs30.672 trillion to Rs34.801 by FY17, and to Rs40 trillion by FY18, the report predicts.

New investment in the public sector would be Rs210 billion in energy, Rs470 billion on infrastructure development, and the social sector would get Rs545 billion.

The overall public and private sector investment would be Rs3 billion in projects such as gas in FY17 compared to the current Rs880 million in FY16, the report added.

This investment would enable Pakistan to build infrastructure such as highways and bridges from its own capital rather than from borrowed money.