ISLAMABAD: The Federal Minister for Finance Ishaq Dar said on Thursday that the average gross domestic product (GDP) growth in the first quarter of the current fiscal year has risen to 5 percent as compared to 2.9 percent in the same period last year.
Making a policy statement in the National Assembly on Thursday‚ the finance minister said that the government is committed to bring the GDP ratio up to 6 percent during the next four years, adding that by the grace of Allah Almighty two third target of the GDP has been achieved in the current fiscal year.
The finance minister said that Prime Minister Nawaz Sharif had made a commitment in the election manifesto that budget deficit will be brought down to 4 percent during the next five years. He said due to prudent economic policies‚ the government has been successful to bring down this rate from 8.8 percent to 8 percent.
Ishaq Dar said it is hoped that budget deficit will further decrease by the end of this fiscal year and the targets will be achieved which will help ensure bring stability in the economy.
The federal minister for finance said that this target has been achieved despite hurdles like payment of huge amount of circular debts and loans while the government successfully was able to save over Rs135 billion that is a record.
The minister said that the government has paid Rs503 billion of circular debt. He said due to non-payment of this amount‚ there was daily load shedding of sixteen to eighteen hours in the country during in the last months of the previous government.
Giving details about payment of the circular debt‚ the minister said that Rs348 billion were paid in the first phase by issuing Rs128 billion worth of Pakistan Investment Bonds‚ cutting and saving expenditure worth Rs135 billion‚ Rs20 billion dividends from public sector enterprises and Rs59 billion of cash paid out of Federal Consolidated Fund.
The finance minister said the remaining Rs138 billion were paid in July by recovering government loans from different organizations.
Ishaq Dar said the country was also paying 14 percent interest on the circular debt and by retiring the debt‚ we would be saving Rs55 billion annually just on account of interest.
The minister said the retiring of circular debt also enabled addition of 1700 MW of electricity to the national grid and as a result the industrial growth surged to 7 percent in the first quarter of the current financial year.
He said that the government took a number of austerity measures to reduce burden on the national exchequer. He said the prime minister’s discretionary fund has been reduced zero. He said the functioning of foreign missions has been thoroughly reviewed and it will save two billion rupees by curtailing different expenditures.
Dar said that 17 percent new companies have been registered during the last five months which shows the interest of the business community in the government. He said similarly‚ the stock exchange growth has also increased by 27 percent.
The minister said that presently the foreign exchange reserves situation is not satisfactory but due to the government’s measures during the next three years it will improve and reach $20 billion.
Clarifying different statements regarding printing of notes‚ he said that during the last five months Rs672 billion new notes have been printed while Rs466 billion notes have been deposited. He said in this way the total new circulation is of Rs206 billion.
