Finance Minister Ishaq Dar has claimed that macroeconomic indicators are showing a modest growth of 4.24 percent in the gross domestic product during the current fiscal year. The lower oil prices in the international market has resulted in the decline of consumer price index at 2.48 percent during July-February 2015-16 as compared to 5.45 percent in the same period last year. The large-scale manufacturing sector has recorded a growth of 4.12 percent and the government is likely to set a growth target of 5.5 percent for the next fiscal year. The tax collections have increased by 17.2 percent during July-February 2015-16 while credit to private sector has been expanded by more than 100 percent during nine months of the current fiscal year. The rising volume of machinery import indicates that development activities are picking up with increased consumption of electricity and gas in the industrial sector. The government has increased the public sector spending to Rs700 billion.
On fiscal side, the current account deficit has come down to $1.859 billion during July-February 2015-16 from $1.947 billion last year, thanks to stable exchange rate, increase in foreign exchange reserves and positive growth in the volume of remittances by expatriate Pakistanis, which have reached over $20.5 billion in the first 20 days of this month. The total foreign direct investment in the country has reached $647.9 million as compared to $619.6 million last year while the indicators of debt sustainability have also improved. The State Bank has lowered policy rate to 320-basis-point, which has led to doubling of the credit disbursement to private sector during the current fiscal year. However, despite the fact that all the all micro and macroeconomic indicators show positive signs of development, why the exports are declining and why the government has to consult the International Monetary Fund and donor agencies for bail out packages is a question which needs an answer. Apparently, the government has failed to cover all aspects of the economy. There is no doubt in the good intention of the finance minister, but his team of experts lacks vision and velour to modernize the economy.
The countries like Vietnam are progressing with leaps and bounds, but the economic managers in Pakistan are grappling in the dark not knowing exactly what to do and where to go. Pakistan, the 40th largest economy in the world in nominal terms and 26th largest in terms of purchasing power parity, seems to be always at a cross road. Until and unless the government overhauls the bureaucratic system and its policymakers agree to learn from the experiences of other nations, the country will continue to face consequences of uncertain and confused policies.