Govt formulating policies to deal with budget, current account deficit: ADB

ISLAMABAD: While indicating $11.129 billion committed loans remained un-disbursed so far, the Asian Development Bank (ADB) on Wednesday stated that Pakistan’s new government was formulating policies to deal with vulnerabilities of budget deficit and current account deficit in order to restore its economic growth.

In its annual report and financial report 2018 released by ADB on Wednesday showed that the total committed undisbursed loans for Pakistan stood at $11.129 billion till end December 2018. The current effective outstanding undisbursed loan amount is standing at $3.81 billion so far. Pakistani authorities when contacted to one top official of economic ministries, he argued that the existing portfolio of ADB stood at around $6 to $7 billion out of which $1.3 billion was budgeted to be disbursed during the current fiscal year including programme and project loans. As the programme loans are not yet being finalised so the project loan disbursement was targeted at $1 billion. So far the disbursement has been moving slowly and efforts are underway to accelerate this process in the remaining period of the current fiscal year, the official added.

However, the ADB report states that Pakistan posted lower growth in the fiscal year 2018, affected by challenges in the country’s balance of payments. A newly elected government, which took office in August 2018, has begun formulating policies to deal with Pakistan’s fiscal budget and current account deficits and restore its economic growth. Through its ongoing country programmes in Central and West Asia, ADB continued to help its developing member countries become more economically diverse, remove infrastructure bottlenecks, foster regional connectivity, generate inclusive growth, promote gender equality, and combat climate change

“Government needs to address falling foreign exchange reserves & rising debt obligations. Pakistan must continue to consolidate governance, increase exports & strengthen public enterprises” it added. Government should improve business and regulatory environments to attract more investment and increase productivity. ADB will continue to support Pakistan’s development through investments framework outlined for 2019–2021.

ADB to help use of smart technology and innovative approaches to achieving the Sustainable Development Goals. Pakistan’s current growth prospects will continue to be influenced by projects under CAREC, the China– Pakistan Economic Corridor, and other development initiatives. Programme will include policy support for the energy sector as well as improving trade and competitiveness. ADB will support the development of an export–import bank. ADB will continue to help government to manage external debt and balance of payments.

In Pakistan, the ADB states that the ongoing construction of a sustainable Bus Rapid Transit (BRT) corridor in Peshawar was about 70% completed by the end of 2018, with operations expected to begin in 2019. This innovative project includes 26km of dedicated bus way through the city, with an associated network of routes totaling over 80km. In Pakistan, the bank provided $275 million for an irrigation project in Jalalpur, Punjab province. This project will construct 200km of new irrigation canals to improve agricultural production of almost 80,000 hectares and benefit 200,000 rural people.