PTI government has taken right policy decisions for reviving the economy as their implementation has started bearing fruit, which is obvious from the economic indicators. The government measures included documentation of economy to increase tax revenue, discouraging luxury imports and increase exports to control trade deficit. The inter-bank market rupee has stabilized around Rs. 156 per US dollar; and the KSE-100 index has crossed 34000 points, which shows confidence of investors. Chairman FBR said on the completion of first quarter that FBR collected Rs. 960 billion in the first quarter of current fiscal year 2019/2020, which is about 90% of the target for the quarter. In a message on social media, he said that tax collection up to 90% of highly aggressive target for quarter ended September 30, 2019 has been achieved. He added that the imports had been contracted by $3 billion during the period.
Pakistan’s current account deficit has decreased by 64 per cent for the first quarter of the financial year 2019-20, due to the reduction in the trade gap between imports and exports. According to the State Bank of Pakistan, the current account deficit has narrowed to $1.548 billion in July to September 2019 as compared to $4.287 billion recorded last financial year, showing a massive difference of $2.739 billion. In July 2019, the current account deficit stood at $678 million, in August $610 million and in September $259 million. The trade deficit has been reduced by 34 % during the period, from $9.45 billion to $6.202 billion. The remittances from Pakistani expatriates in the first quarter stood at $5.47 billion; hence total remittances are likely to be more than $22 billion for the year. IMF program-related inflows and Saudi oil facility helped build SBP’s foreign exchange reserves.
The improvement in exports is due to devaluation, and with inflows of remittances and consistent control over imports may further stabilize the situation of balance-of-payments in the coming months. The government must continue its strict economic policies for the stability of the balance of payments in the remaining months of the financial year, which will enable it to meet at least its target for the current financial year. On September 26, Prime Minister Imran Khan met the executives and teams of a number of world leading companies like Exxon group and AKD group – a security company which is owned by a Pakistani American and convinced them to invest in Pakistan, which is a lucrative market. Exxon Mobil, the world’s biggest Oil &Gas Company has already announced that it will reinvest in Pakistani market after a gap of nearly three decades.
New tourism zones are being formed in KP; 20 new tourist spots have been identified in KP. Industrial sectors profit year ending 30th June 2019: Banking Rs. 147 bn, Cement Rs. 31bn, Auto sector Rs. 121bn; Oil & Gas Rs. 221bn; Fertilizer Rs. 68bn; and Power Rs. 27bn. PIA completes overhauling of Boeing 777 indigenously; government awards license to foreign firms for renewable energy projects. FBR struck a deal with UAE government for exchanging details of Pakistani asset owners; issue of Aqama abuse is also being handled. Global investors bought Pakistan’s local currency bonds for $342 million i.e. Portfolio Investment. Total export quantity increased by 12%, in 2019 YoY basis; textile exports cross $13 bn due to 26% increase in quantity. Imports fall by 20.5% and exports increased by 2.7% FQ FY, trade deficit shrinks by 35% to $5.72 billion and telecom sector revenue will be Rs. 338 bn.
Due to the flawed economic policies of the previous governments, Pakistan’s external debt had mounted to around $90 billion; economic reserves (including SBP and commercial banks) had declined to $12 bn, not enough for even three months imports. As regards payment of installments of previous loans, the country was on the verge of default. Therefore, Prime Minister Imran Khan had to approach Pakistan’s friends Saudi Arabia and the UAE who were generous to deposit $2 bn each in State Bank of Pakistan in addition to supply of oil on deferred payment basis. Thus Pakistan averted the default due to Imran Khan’s efforts. As stated above, the Federal Board of Revenue (FBR) has collected Rs. 960 billion in the first quarter of current fiscal year 2019/2020, which is about 90 percent of the target for the quarter. All of this shows that economic turnaround is now in sight.
It is important to recount the achievements and measures by the PTI government to put economy on the path to recovery and to increase employment opportunities, which includes Pakistan Post launching of National Internship Program with 35000 vacancies. Textile industry showed 26% growth in quantitative terms according to APTMA. Remittances in September 2019 increased by 17.5% compared to September 2018. Despite financial constraints, the government is alive to the problems faced by the people; hence it is focusing on education sector and other projects for the welfare of the people. As many as 7000 children were enrolled in Islamabad under a campaign led by Federal Education Ministry. And first balloting of Naya Pakistan Housing Scheme in Lodhran took place, and to start with 700 people awarded and 100 kept on waiting list. With expeditious implementation of such schemes, people would start realizing that the economic mess was created by the previous governments.
—The writer is a senior journalist based in Lahore.