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Pakistani current account deficit reduced from $20bn to $3bn

Apr 22, 2019
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Current account deficit cut from $20bn to $3bn, cabinet informed
August 12, 2020



Adviser to the Prime Minister on Finance Abdul Hafeez Sheikh while briefing the Federal Cabinet on the status of economy and economic indicators during the first two years of Pakistan Tehreek-e-Insaf (PTI) government, said the current account deficit has been brought down from $20 billion to only $3 billion.

Briefing the media persons about decisions of cabinet meeting chaired by Prime Minister Imran Khan, Minister for Information and Broadcasting Senator Shibli Faraz said the cabinet was informed by the finance advisor that the policy of encouraging exports and discouraging unnecessary imports had paid the dividends. Due to the government’s prudent economic policies, the foreign exchange reserves of State Bank of Pakistan have increased from $8.5 billion to $12.5 billion, he added.

Under the Ehsaas programme, the minister said financial assistance was provided to some 15 million families in a transparent manner, while subsidy was given to the Utility Stores Corporation to ensure supply of daily use items at affordable prices. He said the present government has also given a historic package for the construction sector as the resumption of construction activities would create jobs and provide housing facilities to the poor.

The government had also given relaxation on taxes to the builders to encourage investment in the housing units, he added. The minister said the economic wheel had begun to turn again and Rs 300 billion more tax revenue was collected than the target. He said with the resumption of economic activities, exports had increased and stock exchange shown growth which was an indication of economic stability. Exports reached $ 2 billion mark in the month of July during the current year against $ 1.2 billion in the past, he added.

Shibli Faraz said the cabinet was given a briefing on the encroachments around the Margalla Road (Islamabad). It was told that during the past one and a half years, the Capital Development Authority had retrieved land worth Rs 450 billion. Similarly, the encroachments on Srinagar Highway had also been removed and trees were planted on the retrieved land, while the Quaid-e-Azam University’s land under illegal occupation of mafia was also recovered.

He said the prime minister was informed that payments worth Rs 891 million had been made to the media houses whereas the remaining dues would be cleared at the earliest.

Replying to the media persons’ questions, Shibli Faraz said the Sharif brothers would be would not be let off scot-free and held accountable for plundering the national exchequer and ruining the state institutions. The practice to make assets from the looted national wealth would have to be eliminated, he added. He said the past governments had rendered Pakistan economically bankrupt due to which the country was facing problems like price hike, flooding in Lahore or Karachi.

Nowadays, he said, the opposition leaders were again getting together to save themselves from the ongoing accountability process. They had even tried to get an NRO (National Reconciliation Ordinance) on the pretext of proposing an amendment in the National Accountability Bureau (NAB) law regarding the definition of corruption to their own advantage, he added. The minister criticized Pakistan Muslim League-Nawaz leader Maryam Nawaz for staging a drama to divert the public attention from the real issue and holding a news conference instead of replying to the questions asked by NAB regarding purchase of 1,100-kanal land. It was she, who once claimed that she did not own property in Pakistan what to talk of having property in England, he recalled.

https://dailytimes.com.pk/652659/current-account-deficit-cut-from-20bn-to-3bn-cabinet-informed/
 

Jungibaaz

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I think you better thank COVID 19 for this... because we stopped importing oil for a good period of time.
Agree. Most likely this is covid at work, but still current account deficit was in decline earlier too. It’s still a test for this government how they’ll balance the twin deficits and very little growth, I don’t think we’ll see any nice macroeconomic indicators for at least 3 years.
 

Abdul Majid Saleem

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Nawaz is said to have started construction of most of the cpec projects? Can Imran outdo him ?
Our politician does not have capability to drive the Pakistan towards growing direction.

Just take the power of using cash and other financial resources along with strict check and balance from the whole ruling class, and then we will see how much honest they are to work for country without any personal financial gain.
 

TheDarkKnight

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This is great news if sustained in the long run, now focus on seeing through covid economy and then boost exports.
I remember there was news that Govt wanted to buy some options related to importing oil for next year or so when prices dropped. This could help Pakistan secure lower prices after prices rise - is there any update to it?
 

Dr. Strangelove

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I think you better thank COVID 19 for this... because we stopped importing oil for a good period of time.
Covid did indeed play Some part in it which at best would be 3-4 billion USD at most. In 2018-19 CAD saw a Reduction of 7 billion USD from 20 Billion in the previous year to 13 Billion. Going by the trend of previous year GOP would have achieved a similar Target this year even without Covid.
 

Chakar The Great

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Covid did indeed play Some part in it which at best would be 3-4 billion USD at most. In 2018-19 CAD saw a Reduction of 7 billion USD from 20 Billion in the previous year to 13 Billion. Going by the trend of previous year GOP would have achieved a similar Target this year even without Covid.
Exactly, the deficit had shrunken well before Covid. Pakistan did sacrifice GDP growth for that, devalued the currency.


But its time that Pakistan starts earring from exports. The aim should be to double the exports as early as possible to US $40 Billion from US $ 25 billion.
 

Chakar The Great

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".....To another query about exports target, Abdul Razak Dawood replied that they developed three different scenarios on the basis of which the exports of goods could fetch $22 billion to $24 billion during the current fiscal year. The exports of goods and services, he said, might touch $30 billion mark in the ongoing fiscal year. He said the food processing exports went up by 300 percent, clothing and garments 300 percent...."


Source: https://www.thenews.com.pk/print/696302-pakistan-exports-witness-5-8pc-growth
 

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