Abdul Hafeez Shaikh presents Economic Survey Report 2018-19
ISLAMABAD: Finance Adviser Abdul Hafeez Shaikh while presenting the Economic Survey Report has said that Pakistan needs to boost production and exports if it wishes to progress and Prime Minister is committed to doing things differently.
Finance Adviser Abdul Hafeez Shaikh revealed the Pakistan Economic Survey report on the economy for the fiscal year 2018-19 while addressing to pressers.
He announced that it would increase next fiscal’s revenue target to Rs5.550 trillion — almost 35.4 percent or Rs1.450tr higher than current year’s revised estimate of Rs4.100tr — and all civil and military institutions would contribute to the austerity-oriented federal budget for 2019-20.
The next year’s budget would have three key combinations: fiscal consolidation, austerity, and additional revenue mobilization, he said.
While addressing to the press conference Finance Adviser said, “It is important for us to understand the fundamental flaws in our economy.”
“Institutes who are in trouncing situation are distressing national treasury by 1300 billion, but the ruling government still not burdened the poor’s by the current fiscal budget.”
“It would be notified in a matter of time — steps are taken to stabilize the economy of Pakistan.”
Taking at Pakistan’s indebtedness, he brought attention to impending debt repayments to highlight the severity of Pakistan’s economic crisis.
“The economic deficit of Pakistan was 32 billion in the era of the last ruling government because they took loans of 31 thousand billion. They won’t concentrate to motivate the business community. 100 billion of loans are also taken from the sources other than revealed, he stressed.”
Abdul Hafeez Shaikh expresses on exports that have stagnated and imperiling economy of Pakistan, Finance adviser regretted that Pakistan doesn’t have the capacity to return $100bn of loans.
“This is an important issue which threatens Pakistan’s economy. We are highly exposed to foreign loans and foreign exchange which is not matched by our capacity to pay it back. No one has paid any attention to increasing this capacity,” he added.
He stressed that necessary reforms have not been taken to boost exports. Pakistan needs to boost production and exports for progress.
“If you look at countries that have made meaningful progress over the last 20 years, they all did one basic thing: they figured out how to sell their products abroad,” Hafeez Shaikh has said while stressing the need to reorient government policy to boost exports.
He also took a swipe at public expenses, noting that the government was spending Rs2.3 trillion beyond what it was generating in revenues.
“If you spend trillions beyond your income, you will need to borrow, print money and increase prices. These all lead to increased inflation,” he explained.
“We are already exposed on the external front, and we have imbalances in our revenues and expenditures as well. We have a twin deficit which, if it is not resolved, will lead us to default. Make no mistake about it.”
“Prime Minister Imran Khan had committed to the people that he will do things differently and correct our imbalances in a permanent manner. Even if we have to bear [the pain] for six months, a year or a year-and-a-half, [we are committed to the process],” Shaikh said.
“Naturally, the government started by addressing the key threats. First, imports. We were importing all sorts of things, and we had to control that. If we were facing a shortage of dollars, we do not need to buy luxury goods from abroad.
“We increased prices through tariffs so that if the rich wanted to purchase these items, they would have to pay extra. Duties were increased, and these measures contributed to the narrowing in the current account deficit.
“Separately, the government created incentives and new policies to boost exports. It gave more subsidies out of its pocket on power and gas to exporters and business.
The budget 2019-20 would be announced in National Assembly tommorrow on 11 June.