Economy showing signs of recovery

Thursday, September 03, 2009

ISLAMABAD: Pakistan's economy is showing signs of recover - its remittances are up despite global downturn, local economy is stabilising and global trends are showing signs of improvement, foreign portfolio investment is improving and electricity problems would be mostly over by next year, said an IMF official in an exclusive interview with a leading Pakistani Financial daily.

"Pakistan's inflation rate came from 25 percent to 11 percent, its forex reserves position is better and fiscal side is also somewhat stable, despite challenges," said Adnan Mazarei, Assistant Director, Middle East and Central Asia Department of the IMF, who also heads the IMF review missions. Pakistan remittances were 19.13 percent in July at $747.22 million and maintained a similar trend in last few months.

Pakistan received $22.6 million in July in foreign private investment from developed countries though $26 million were repatriated by Developing Asia. The IMF in its report has envisaged a growth rate of 3 percent for the current year, which was at 2 percent in 2008-09. Foreign portfolio investment is a sign of sentiments while FDI is more important but this improvement signals somewhat betterment in sentiment of investors towards Pakistan.

However, Adnan did not shy away from counting challenges the country is facing now - revenue mobilisation, the key issue for the country which also creates room for social sector spending which is badly hurt in the country, believed probably the most optimistic observer of Pakistan economy in the IMF. "Pakistan's tax revenues are among the lowest in the world right now and any improvement in it will allow spending on health, education and infrastructure," said Adnan.

(BRecorder)