Pakistan's economy has potential to grow at an annual rate of 4pc: Moody's

Dunya News

The report said there is a possibility of higher growth rates in the future

ISLAMABAD (Dunya News) – International credit rating agency Moody s has said in its report that Pakistan s economy has the potential to grow at an annual rate of 4%.

The Moody s report said that Pakistan s economy has the potential to grow at more than 4% per annum and the increase in LSM growth rate will further boost the country s overall economic performance.

The report said there is a possibility of higher growth rates in the future after achieving economic stability.

On the other hand, Federal Minister for Finance Shaukat Tareen said that the continuation of comprehensive and sustainable growth is one of the top priorities of the present government, adding that for the first time in 10 months, Pakistan managed to get more than Rs 4 trillion in revenue.

He said that for the first time since the 1960s, a government has drawn up a comprehensive and sustainable roadmap for the economy. Efforts will be made to collect revenue of Rs5800 billion in the next financial year and 1.5% turnover tax will not be applicable in special economic zones. He said incentives will be given to agriculture, industry, value added sector and IT. Revolving credit will be phased out.

Addressing a webinar titled, “Budget 2020: Balancing Stability and Growth” organized by Institute of Policy Reforms, the minister said the government had already constituted an Economic Advisory Council (EAC) to evolve development strategies with the help of experts to ensure sustainable growth of about 12 different sectors.

He said that the Economic Advisory Council (EAD) in leadership of Adviser to Prime Minister on Institutional Reforms and Austerity, Dr Ishrat Hussain would give his findings to the government within a week for achieve the agenda of sustainable growth in the country.

The minister said Pakistan needed inclusive and sustainable growth as few regional countries were experiencing so, he added, a planned roadmap was being developed which the current and successive governments would follow to have consistency in the planning process.

He called it an economic paradigm shift that was the first time the government was making such a comprehensive roadmap for development of the economy since the sixties.

The minister said enhancing revenue collection would be the top priority of the government, adding that currently the revenue collection was less than 10 percent of Gross Domestic Product.

Shaukat Tarin said that our main focus was on economic growth to achieve the agenda of poverty reduction and provide employment opportunities to the people.

He said the measures already adopted by the government boosted revenues beyond Rs 4 trillion benchmark till now, which he termed historic, hoping to raise it to around Rs5. 8 trillion during the next fiscal year.

The minister said that the government is committed to achieve the revenue growth of Rs. 5.8 trillion to Rs 6 trillion for decreasing the fiscal deficit and providing more resources for economic development in the country.

The government had not imposed any new tax in the upcoming budget 2021-22 but it would broaden the tax base with use of technology to reach unreachable areas and increase revenues.

The minister said the incumbent government would not put more burdens on the taxpayers and tariff would not be further increased.

Prime Minister Imran Khan had great sympathies for poor people and he did not want to burden them, Tarin said.

He said the current upward trend in inflation was due to increase in food prices and the government was making all out efforts to reduce it.

The minister said the government would enhance funding of the Public Sector Development Programme (PSDP) to Rs 900 billion and this time projects would be launched with Public Private Partnerships to promote growth. Likewise, he added, agriculture was another prime focus of the government.

He lamented that Pakistan was converted from food-exporting to food-importing country, so the government’s focus would be on reversing this trend.

He said there was also a need to focus on all agriculture chains, adding that a progressive plan was being put in place with a number of incentives for agriculture reforms.

Shaukat Tarin said that the government is fully focused on the food inflation and to restrain the food inflation, “We need to enhance the agriculture production in the country.”

He said the government was also focusing on making industry more efficient to enhance exports manifold. He was of the view that the government is also focused on the power sector for resolving the main challenge of circular debt.

Minister said the government prioritizes controlling the electricity prices through lower power tariff for providing relief to the domestic consumers as well as the industrial sector.