‘Economy to grow 4pc by end-FY12’

Finance Minister Dr Abdul Hafeez Sheikh

KARACHI: Federal finance minister Dr Abdul Hafeez Sheikh Saturday said the country’s troubled economy would end up in a “manageable” position and is expected to grow by four per cent by the end of current fiscal year, FY2011-12.

“We would be uncomfortable but in a manageable position (at the end of the year),” the finance minister told a ceremony at Karachi Stock Exchange while giving an account of economic opportunities and challenges the country was facing at this mid-term point. The finance minister also brushed aside the impression that Pakistan was “dependent” on a powerful country or institution for its economic survival saying not a single penny had been borrowed from IMF since 2010. ”Nor we received a considerable amount from a big power that could impact us effectively,” he asserted.

Further, the minister said taking austerity measures so far his government had succeeded in restricting its budgetary expenditures at 45 per cent against the allocated 50 per cent to avoid loans. On tax front, he lamented Pakistani nation, as a taxpayer and tax collector, had failed to do well thus plunging the country’s tax-to-GDP ratio to the lowest level of nine per cent. The finance minister, however, was happy to declare that during the first half, July-December FY12, the Federal Board of Revenue’s (FBR) tax collection had increased by 27 per cent to Rs840 billion. Last year the growth in tax collection was 17 per cent.

Even if it increases at a pace of 27 per cent, the country’s tax collection seems unlikely to meet the government’s target amounting to Rs1952 billion, registering a 25 per cent raise compared to FY11.On the current account front, the minister said the country’s exports had grown by four per cent during July-December of FY12, which was “good under the circumstances”. Last year, he said, the exports had registered an unprecedented boost of 25 per cent to stand at $25 billion. Worker remittances, Dr Hafeez, said was another comforting factor that had so far impressively kept the pace of $1 billion per month. “Our foreign exchange reserves are near $17 billion and we are trying to achieve our budgetary targets,” he added.

Terming the unique prevailing global economic uncertainties, energy crisis and security situation as major challenges for the country, Dr Hafeez said “our basic numbers give us the comfort that we are not heading towards a crisis.” About the annual debt repayment of $1.2 billion to IMF, he said these were budgeted amounts and not new things as being reported. “All these things are budgeted and reflect part of the economic forecast,” he said. – PT