Pakistan’s economy in growth mode: Baqir from SBP

ISLAMABAD: Pakistan State Bank Governor Dr Reza Baqir said Pakistan was getting positive signs of economic recovery and hoped the country would not revert to the International Monetary Fund (IMF) program for a plan safety.

“The Pakistani economy has recovered and we are in growth mode,” SBP Governor Dr Reza Baqir said Thursday at an exclusive conference at the Policy Research Institute of Islamabad ( IPRI).

He also said that the decision to convert the exchange rate from a fixed exchange rate to a market-based mechanism has yielded dividends for the economy as the rupee bolsters and boosts investor confidence.

Understanding the indispensable nature of remittances, which have swelled to more than $ 2 billion per month, he said the Roshan Digital Accounts (RDA) initiative has generated 181,556 new accounts, disbursing $ 1.56 billion.

“Let’s work to improve inflows as our economy grows at 4%,” he said. He was convinced that with positive signs of recovery, Pakistan would not return to the IMF in the future for another bailout.

Explaining the economic outlook from the point of view of the central bank, the governor said Pakistan had succeeded in containing the waves of Covid-19 which had opened up new prospects for prosperity.

He defended his policies and said the current account deficit which had reached $ 19 billion at one point was now converted into a surplus and the budget deficit had been reduced by 1%.

“Our foreign exchange reserves stood at $ 16 billion now, up from $ 7 billion in 2019,” he added.

Calling the stabilization program a success, he said steel and cement production had increased and the policy of financing the housing and construction sectors had led to a boom.

Baqir said SBP’s political support measures during Covid were “aggressive, protective, flexible and targeted.” In the face of falling domestic demand and falling inflation, the regulatory bank aggressively cut interest rates, which has worked very well.

“The SBP injected 5% of GDP cash to support jobs, public health and investments to avoid bankruptcies during the pandemic.”

The SBP has set up programs in collaboration with banks to extend principal and provide concessions to lenders. He cut the key rate by 625 basis points in a short period of time.

The governor foresaw the industrialization of the country and hoped that the turf fund would allow companies to import machinery and expand the patchwork of production.

He referred to the state of the current account and the budget deficit when called upon to take over the business of the central bank. Despite difficult pre-Covid economic circumstances when foreign exchange reserves fell to $ 7 billion with a current account deficit of $ 19 billion, the road to recovery was palpable when the pandemic struck and presented serious challenges economic conditions in a depressed global and regional economic environment.

SAP interventions, such as the move from a fixed to a market-based exchange rate and discount rate interventions, have helped to halt the economic downturn and improve the fundamentals of the economy. economy. He explained the economic recovery and relief measures such as reducing discount rates by 625 basis points, which helped prevent liquidity losses from turning into solvency problems.

He cited interventions such as the Temporary Economic Reform Facility (TERF) that have helped boost industrial productivity in an environment of depressed demand. The Principal Loan Extension Program and the Rozgar Scheme to Prevent Layoffs have provided timely loan relief and working capital to entrepreneurs, as well as the working class.

The cumulative relief granted amounted to five percent of GDP, with 95 percent of the beneficiaries of the loan extensions being small and medium-sized entrepreneurs.

The above aid scheme was complemented by a generous housing and construction finance program with an improvement from 1.5 billion rupees to 200 billion rupees. The GDR was another achievement, encompassing 171 countries; 181,556 accounts and $ 1.5 billion in deposits.

The measure was a great way to connect seven to nine million overseas Pakistanis to the national economy. Measures such as Roshan Apna Ghar and Roshan Samajhi Khidmat are introduced by digital means to enable non-resident Pakistanis living abroad to be part of the national economy.

The greatest achievement, according to the governor, has been the provision of relief and the promotion of growth without negatively impacting the fundamentals of the economy.

About Larry Noble

Check Also

Peter Obi, Oseni Rufai and the importance of a “no consequence” manifesto, by Rotimi Akinola

If left unchecked, Labor Party candidate Peter Obi will degenerate from 2023 election darling into …

Leave a Reply

Your email address will not be published.