Incumbent govt has overcome fiscal & trade deficits: Hafeez Shaikh

ISLAMABAD, Pakistan: The Prime Minister’s Adviser on Finance Abdul Hafeez Shaikh has said that the federal government has overcome the fiscal and trade deficits as difficult decisions taken by the incumbent government have started bearing positive results on the economic front.

While addressing a news conference along with the Federal Board of Revenue (FBR) Chairman Shabbar Zaidi in Islamabad on Saturday, Hafeez Shaikh said that the trade deficit witnessed a decrease of 35 percent and fiscal deficit 36 percent during the first quarter of current Fiscal Year 2019-20.

Hafeez Shaikh said that the current account deficit has been reduced to the record level. For this, he added that, we struck agreements with the friendly Countries as well as International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB).

The adviser said that our exchange rate and foreign reserves are standing at strong levels with 16 percent surge has been made in revenues. He said that 800,000 additional people have come to the tax net. The adviser on finance said that the government hasn’t made any borrowing from the State Bank of Pakistan over the last three months with the aim to control the inflation. He said that we have also not taken supplementary grants as there is check on the expenditures.

Hafeez Shaikh said that the non-tax revenue has contributed Rs 406 billion in the first quarter of current fiscal year, which he added, is 140 percent more than the last corresponding period. He expressed the confidence that the government will be able to raise Rs 1,600 billion through non tax revenue this fiscal year.

Abdul Hafeez Shaikh said that the confidence of foreign investors is also increasing on Pakistan. He said that there has been an additional US$ 340 million net portfolio investment.

The adviser pointed out that the exports remained stagnant over the last five years. However, the exports are now increasing as a result of support given to the industries in the form of subsidy on gas, electricity and loans.

The financial adviser said that the incumbent government has also focused on overseas employment of Pakistanis to increase remittances. He said that 24,000 people went abroad last year for employment whilst this year this number has surged to 373,000.

Hafeez Shaikh said that international financial institutions including the IMF and the World Bank are also giving positive statements about Pakistan’s economy.

In reply to a question, the advisor said that the government will unveil a comprehensive policy regarding Small and Medium Enterprises (SMEs) within two weeks. He said that the policy will contain proposals of financing SMEs, incentives, ease of doing business and speedy approvals.

Responding to a question, the advisor said that the government agencies are working in union to ensure that Pakistan comes out of the Financial Action Task Force (FATF) grey list at the earliest. He said that it is in Pakistan’s own interest to check money-laundering.

Responding to a question, the FBR Chairman Shabbar Zaidi said that dialogue with trader community is progressing positively and there is no deadlock in it.