Pakistan to make bond payments in excess of USD1 billion, inflation rate remain on target, GDP to grow 5 to 5.5 percent in FY17

Pakistan to pay around $1 billion worth of foreign bonds maturing in next two months and inflation is expected to remain in the government’s estimates during the current fiscal year.

Federal Finance Minister Ishaq Dar stated while giving interview to foreign news agency in Yokohoma, Japan. He was visiting Japan to attend the Asian Development Bank 50th Annual Meeting.

The inflation rate has come down drastically from three years ago and now hovering within the estimates of the government. During the current fiscal year the inflation would be lower than estimates of 6 percent as it has been around 4 percent. “We expect to inflation to remain under 6 percent in fiscal year too”, he said.

Regarding the appointment of the Governor State Bank of Pakistan, the finance minister said the appointment of the Acting Governor SBP has been done under the act, he will for 90 days. “We need a permanent governor and anybody could be the governor, even the previous governor who completed the first term could be called, but all depend upon the Prime Minister’s nod”, he said.

The economic growth has been eight year high and averaging more than 4 percent per annum, while “we expect the economy to grow by 5 to 5.5 percent in the current fiscal year”, he said. The country’s economy has been under reported by 20 to 25 percent as we are using two decades old mechanism to calculate the economic size. The government has received permission from the World Bank to conduct a survey to review the economy size and we will include the SME sector in the country’s economic numbers.

During next fiscal year we target the economic target could be around 7 percent. Our government wanted to stay with the reform agenda and Prime Minister Nawaz Sharif government first kept the house in order and now working that each growth of the economy would be higher from previous year.

Reply to a question with loan taken from the Chinese government, the Finance Minister said we haven’t ask any fresh loan from the Chinese government rather we paid $500 million loan from the Chinese government, paying and going for new loans have been the accounting cycle.

Last year we paid bonds payment worth $500 million and in next two months bonds maturing worth $750 million and $300 million would be materialize and we would pay the amount, he added.