Outlook for economy strong: Hafeez Shaikh

ISLAMABAD: Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh has said the outlook for the economy is strong and pick-up in exports and remittances are supporting the growth momentum.

"In December 2019, the large scale manufacturing output expanded by 16pc on month on month basis, indicating that growth is starting to pick up," he said while talking to a group of television anchorpersons at his office on Monday.

The meeting was part of the Adviser Finance's efforts to update the media and public on key economic policies and progress on reforms. The meeting was also attended by MNA Ms Kanwal Shauzab and Omar Hamid Khan, Special Secretary Finance.

Dr Abdul Hafeez Shaikh shared updates on the recently-concluded second review of the IMF staff by saying that the IMF staff concluded that “all end December performance criteria were met, and structural benchmarks have been completed. This has led to the IMF staff and Pakistan authorities reaching a staff level agreement which has paved the way for the IMF Board to release the next tranche of U$450 million in April 2020."

The adviser also highlighted that the government had achieved a primary surplus of 0.6pc of GDP (Rs 286 bn) in the first half of the FY2020, the first time in over 10 years. “This has been achieved through stronger revenue collection with FBR tax collection rising by over 16.5pc and through austerity in expenditure,” he said.

He further said that the non-tax revenue collection during the first half of FY2020 had also gone up by 170pc on year-on-year basis to reach Rs876 billion (Rs323 billion in the same period last year) which would help reduce the build-up in debt. “During the first two years of the current government, over Rs5 trillion in debt had been repaid to domestic and international creditors,” he added.

Dr Shaikh expressed concern over the high inflation and apprised the participants of the government's efforts to reduce the burden on public. He highlighted that inflation has declined in the last seven weeks and the CPI inflation has declined to 12.4pc in February 2020, down from 14.6pc in January 2020 as a result of proactive measures by the government to allow imports and increase supply through Utility Stores.

He said the government had doubled allocation in social safety programmes under the Prime Minister’s Ehsaas Program to Rs192 billion in FY20. However, many challenges remain, particularly the energy sector challenges, he added.