KARACHI: Resident Mission Chief, IMF Dr. Tokhir Mirzoev said that there is no possibility of bankruptcy of Pakistan in the near future as Pakistan’s economy is steadily improving.
He was addressing at a seminar entitled “State of the Economy and Way Forward” organized by Applied Economics Research Center Karachi University today at AERC Auditorium KU.
In 2016, Pakistan’s economic growth rate is 4.6 percent while India leads the region with 7.5 percent; Bangladesh interestingly has a better growth rate of 6.8 percent from China’s growth rate of 6.3 %. Pakistan’s exports have declined and are just 9 percent of the total GDP but the low oil prices and strong remittances helped in maintaining the economic stability.
Inflation rate and budget deficit has also declined which is a sign of economic growth. Tax revenue collection has improved and rose to 11 % still it must be raised to at least 20 percent. IMF program in Pakistan started in 2013 to help the country get out of the financial crisis and out of 6.7 billion dollars; 5.2 billion dollars are disbursed till yet.
The program has structural reform priorities in the sectors of energy, tax to GDP ratio, privatization of public sector enterprises and lastly improving the business climate and environment.
“IMF did impose conditions on Pakistan that includes removal of subsidies in the public sector”, IMF Resident Chief admitted
He added that Pakistan’s foreign debt is around 64 percent of its total GDP which is not a very concerning ratio, many states have more debt ratios in this regard but Pakistan has to take advantage of the significant opportunity of low oil prices by reforming the energy sector. UK, Turkey, Korea and many European states have remained on IMF relief programs and now they are progressing. CPEC is a big opportunity for boosting Pakistan’s economy.
Dean Faculty of Social Sciences Karachi University Prof. Dr. Moonis Ahmar said that policy of self-reliance is pivotal for economic uplift. China and India followed the policy of self-reliance and now they are the world’s most progressing economies. Tax to GDP ratio, exports must increase in order to strengthen our economy as our current exports are 25 billion dollars while Bangladesh earns 25 billion dollars only through its garments exports out of its total exports of 30 billion dollars. 40 percent of the population of Pakistan lives below poverty line that indicates our economic backwardness. Government must curtail its expenditures and implement practical long term measures for economic growth.
Dr. Ahmar who is also the Acting Director of AERC lamented upon the fact that since day one we are dependent on foreign aid or loans and this practice is still in continuation as the government is now again taking loans to repay loans. Public Holidays on frequent basis are causing a negative impact on our economy as a single holiday costs millions of rupees to the economy which is unbearable. NNI