ISLAMABAD: Adviser to Prime Minister on Finance, Miftah Ismail Friday said the government will mainly focus on setting the target for a high economic growth rate along with a controlled inflation rate in the budget of 2018-19, to be announced on April 27, besides setting ambitious revenue targets for the next fiscal year.
“This year, the country’s economic growth will remain around 6 per cent while during the next year, the growth rate will further increase, which will help in speeding up the overall business activities,” he said.
He said, “We are below the target for an inflation rate of less than 4 per cent which is a good sign for the common people”.
Addressing the media at the Finance Ministry, the adviser said during the current year, the country is set to achieve the highest growth in its history of 6 per cent and the lowest inflation rate which shows that the overall economy has turned around in the last five years.
He said that although the current account deficit was a bit high, there was no need to worry because this was due to imports of machinery for installing various energy industries of over 12000 MW.
However, he said by the next year, the current account and budget deficits would remain under control as the import of such machinery would decline, while exports will eventually increase at a faster pace.
Replying to a question regarding the recent report by the International Monetary Fund (IMF), he said that IMF’s projections were not always accurate as it had estimated the country’s growth rate at 5.5 per cent for the current year while in fact, it was touching around 6 per cent. Similarly, he said the IMF projected 6 per cent inflation rate for the year while in reality, it remained under 4 per cent.
To another query regarding the closure of Pakistan Steel Mills (PSM), the adviser said when the mill was functioning, it was selling its products worth Rs850 million at the cost of Rs2 billion per month and it was was not possible for the government to allow such a huge subsidy on that account.
He said the total number of employees in PSM was 10 times higher than the standard number, and that was why it was running in losses. Regarding circular debt, he said that as per the approval by the Economic Coordination Committee of the Cabinet (ECC), the government will pay most of the circular debts to the IPPs, Gencos, Discos, nuclear power companies, and Pakistan State Oil (PSO) by next Monday.
Miftah Ismail said the government will prefer to pay the Independent Power Producers (IPPs) on priority and they will be cleared within a few weeks.He added that the government will also give relief to the people specially government employees as their salaries would be raised according to the rate of inflation.
To another question regarding the Free Trade Agreement with China, the adviser said after signing of the agreement, Pakistan had to look for new markets in China to increase its exports to the country.