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Govt devising policy to shield vulnerable against price hike: Planning Minister

December 12, 2018: Minister for Planning Development and Reforms Makhdoom Khusro Bakhtyar on Wednesday said that the government is devising a strategy to shield most vulnerable segments of the society against the price hikes in the 53 essential commodities reflected in Sensitive Price Index.

Addressing the 34th Annual General Meeting and Conference of Pakistan Society of Development Economists (PSDE), the minister said that the government would compensate it with provision of social protection to the masses.

The event was organized by the Pakistan Institute of Development Economics (PIDE) with a theme “Pakistan's Economy: The Way Forward”.

Khusro Bakhtyar said that the present government had inherited very weak economy with depleting foreign exchange reserves, fiscal and current account deficit, rising inflation, increasing foreign and local debts, decreasing exports and increasing imports.

He said that PPP government had inherited an inflation rate of 14.1 percent in March 2008 and they took it to 21.5 percent in first 100 days by increasing of 7.4 percent, while the PML-N inherited inflation of 5.1 percent in May 2013 and they took it to 8.5 percent in first 100 days which means an increment of 3.4 percent.

The PTI, he said got inflation of 5.8 percent in July 2018 and after 100 days it rose to 6.5 percent in November 2018 and witnessing an increase of 0.7, adding that drivers of inflation in all 3 episodes were depreciation of currency and upward adjustment of utility prices.

He further said that national economy was facing deep rooted structural problems as the economic growth was normally factor driven and consumption is artificially boosted to uplift economic growth. The quantum of consumption in the country was at 93 percent of GDP which was highest among emerging economies whereas investment and savings were one of the lowest, he remarked.

This ratio in neighboring countries like India was at 70 percent and in Bangladesh it was  74 percent whereas investment in these countries were above 30 percent while in Pakistan this ratio is just 16 percent, he added. The savings rate in Pakistan is less than half of these countries.

Planning Minister said that the structural imbalance between consumption and investment resulted in higher current account deficit while private investment rate continuously fell in 4 years in a row from 10.4 percent of GDP in 2014-15 to just 9.8 percent in 2017-18.

The growth strategy of the government focuses upon building strength of economic fundamentals such as quality and inclusiveness of economic growth or human capital, up scaling technological capability, sustainable agriculture, social protection, financial inclusion, competitiveness and above all an investment strategy for efficient resource allocation.

Khusro Bakhtyar said that small and medium enterprises sector in the country has a huge potential to absorb the skilled and semi-skilled youth and government would provide incentives to exploit the SMEs to create more job opportunities for youth.

The minister said that special economic zones under China-Pakistan Economic Corridor would start working by the second quarter of the next financial year, adding that it would help establish joint industrial ventures with China to develop the local manufacturing sector.

He said that after agriculture cooperation, the industrial frame work agreement would be finalized in the 8th Joint Economic Cooperation Commission meeting which is scheduled to be held on December 18 this year.

The minister said that government is working with a holistic approach to develop the agriculture sector, promote the export led industry and enhance the service exports to put the economy on strong fundamentals for rapid socio-economic growth of the country.

He called upon the academia, economic experts and policy makers for putting their synergies together to put the economy on fast track development to achieve the desired goals of social prosperity and economic development of the country.

The minister said that the outcomes of the three-day event would help the government to address the key economic issues and formulating the policies to exploit the untapped potential of the country.


Posted on: 2018-12-12T17:39:00+05:00


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