Tough economic reforms have started bearing fruit: Hafeez

ISLAMABAD: Prime Minister’s Adviser on Finance Dr Abdul Hafeez Shaikh has said difficult decisions on the economic front have started showing positive results, as all the macro-economic indicators recorded resilience during the first quarter of current financial year.

Addressing a news conference along with Federal Board of Revenue (FBR) Chairman Shabbar Zaidi, here on Saturday, Dr Shaikh said economic reforms had gradually started showing results.

He said owing to the reforms, the current account deficit shrank by 35 per cent in the first quarter of financial year 2019-20, and the fiscal deficit witnessed 36 per cent reduction in the first-three months of current financial year.

The Prime Minister’s aide said revenue collection witnessed about 16 per cent growth during the period under review, adding the government had not borrowed any money from the State Bank of Pakistan nor released any supplementary grant in order to ensure strict adherence to fiscal discipline.

The non-revenue income also registered about 40 per cent growth compared to the same period of last year and achieved Rs 406 billion, adding non-revenue income was expected to reach Rs1,600 billion as against the set target of Rs1,200 billion.

Dr Shaikh said billions of dollars were wasted in the past in order to artificially keeping the exchange rates stable. He said the present government had introduced market-based exchange rate and due to which it was stable for the last three months, and foreign reserves also witnessed a significant increase. The net portfolio investment was increased by $340 million, which also helped in restoring the confidence of foreign investors, he said, adding exports, which had been stagnant for the last five years, had also started recording growth.

He said overseas employment witnessed increase of over 150,000, as during last year from January to August, about 224,000 Pakistanis went abroad as against 373,000 during current year.

He said investors’ confidence was also restored in stock market, as it had showed 22 per cent growth and the index had reached 34,000 points. Dr Shaikh said all the measures that had been introduced by the government aiming at bringing the prosperity and welfare in the life of a common man and the results of all those measures would ultimately benefit the common man in the country.

Replying to a question, he said the government had also made appropriate releases for the development projects under the Public Sector Development Programme (PSDP) and released extra funds as compared to last year. To another question, he said small and medium enterprises sector was vital for economic development of the country, adding the government would introduce SME policy during the next two weeks and announce facilities for SMEs.

Regarding the Financial Action Task Force (FATF), the adviser said all the national institutions were making their all possible efforts to ensure full compliance of the FATF as it was in the larger interest of the country. He added the country was determined to come out of the grey list as soon as possible.

Speaking on the occasion, FBR Chairman Shabbar Zaidi said fruitful negotiations with the Ministry of Finance of the UAE were held that would help in the identification of potential tax payers in the country. He said negotiations with traders were in progress, adding so far over 40 meeting had taken place and all the issues would be addressed amicably.