Aziz says upbeat ratings vouch for economic stability

ISLAMABAD: Sartaj Aziz, deputy chairman planning commission, on Tuesday said international ratings agencies were optimistic about the Pakistan’s economic performance, predicting the country to emerge as one of the fast-growing economies in the world in the coming years.

“In 2016-17, the real GDP growth was 5.3 percent, highest in last nine years owing to improvements in energy supply along with security situation, the two key bottlenecks which were holding back the performance of the economy,” Aziz said addressing a conference titled, organised by Pakistan Society of Development Economists.

“Pakistan’s economy has seen a noticeable turnaround in the last four years as a result of cumulative impact of macroeconomic and structural reform programme, while the deficit reduced from 8 percent in 2012-13 to below 5 percent in 2016-17 and inflation down to a single digit.”

Aziz continued that the country successfully executed $1 billion five years’ Sukuk and $1.5 billion ten years Eurobond transactions at a profit rate of 5.625 percent and 6.875 percent respectively and this reflects the confidence of global investors in Pakistan’s economy.

On redefining the paths for the future, Aziz said it was important to carefully analyse the dramatic changes taking place in the world economy as economic dynamism had shifted from advanced economies to emerging markets. “China is rebalancing its economy from manufacturing to services, investments to consumption, from exports to domestic services and this means slower but more sustainable growth path,” he said while quoting example of Chinese economy.

He added that the major economic powers including US and European Union were facing structural issues of aging populations, growing debts, weak financial institutions and global financial crisis, which has brought about a shift in policies that will allow a greater role to the public sector in steering the national economies.

Aziz asserted that due to rapid transformation of the global economic order, it was necessary for Pakistan to reposition itself in the world economy. “Pakistan’s outlook for economic growth is favorable due to China-Pakistan Economic Corridor (CPEC) investments, improved availability of energy, and growth supporting structural reforms,” Aziz added.

He further said that Pakistan possessed fundamental advantages that could be harnessed to prepare the economy for a leadership role in global economy by becoming a regional food basket and an engineering hub. “Now under CPEC there is great potential for industrial and agricultural development as both sectors are major contributors to Pakistan’s GDP,” he pointed out and added nine Special Economic Zones along with CPEC routes will help both sectors to increase their productivity as per their potential.

Aziz in his concluding remarks said the country needed political stability, national unity, and a sound macroeconomic policy framework to take full advantage of the opportunities.