ISLAMABAD: The Finance Ministry has clarified that present government inherited a fragile economy characterized by low investments, high inflation, low GDP growth, high fiscal deficit and low level of foreign exchange reserves.
Spokesman of Ministry of Finance in a statement issued on Wednesday in response to a news item regarding increasing fiscal account’s deficit, said the present government soon after assuming responsibilities, launched a home grown program of economic reforms and in last four years achieved a remarkable economic turnaround which is recognized by international community.
The spokesperson said current account deficit was recorded at US$12.4 billion during 2017 as compared to US$4.9 billion in 2016 which was mainly due to increase in imports of machinery, industrial raw material and petroleum products. These imports are enhancing productive capacity of the economy for higher output and exports in future.
The Finance Ministry claimed that GDP growth of 5.3% last fiscal is the highest in the last ten years and tax-to-GDP ratio has increased from 10.1% in 2013 to 12.5% in 2017. Regarding fiscal deficit, the Ministry claimed that it has been reduced from 8.2% in 2013 to 4.6% in 2016. Fiscal deficit in 2016-17 increased to 5.8%.
The Ministry also claimed that FBR tax collection registered a cumulative growth of 77% between 2013-2017 and development spending has increased by 300% in four years.
The spokesman also claimed that inflation has been brought down in the range of 4 - 5% in 2017 from the average of 12 percent between 2008-2013.
The Finance Ministry claimed that Pakistan’s foreign exchange reserves which were US$11.02 billion while SBP reserves were US$6 billion in June 2013, presently foreign reserves are at a healthy level of about US$19.8 billion with SBP reserves at US$13.6 billion.
The Finance Ministry claimed that security situation has significantly improved, uninterrupted energy is now being provided to the industrial sector and global economic outlook is positive.
Regarding Foreign Direct Investment (FDI) inflow during July-October 2018, the Finance Ministry claimed that it was $ 940 million compared to $ 539 million during the same period last year, registering a massive growth of 74.4%.