Pakistan’s economy moving toward stabilization amid third wave: Dr Reza Baqir

April 12, 2021 (MLN): State Bank of Pakistan (SBP) Governor Dr Reza Baqir said that we have entered with good economic indicators in the third wave of COVID-19 when compared with the previous two waves as macroeconomic fundamentals are moving towards stabilization. He anticipated that economy would perform better compared to the previous year.

Today, SBP Governor visited Pakistan Stock Exchange (PSX). In a session with officials and members of PSX, he said that PSX has the full support of SBP.

“We are satisfied with the performance of Banks as they have been functioning smoothly with SBP,” he said.

Shedding some light on the recent economic developments, he said that workers’ remittances continued their record run as they rose to $2.7 billion, up by 43 percent compared to March 2020, heading for another good month as the arrival of Ramazan and Eid may trigger the remittances from overseas Pakistanis.

On the real sector, he highlighted that the Large-Scale manufacturing sector (LSM) surpassed its pre-COVID level of production in Jan FY  2021, witnessing 9.1 percent growth on a YoY basis compared with negative growth of 5.7 percent in Jan FY 2020.  During July-Jan FY 2021, LSM grew by 7.9 percent against negative growth of 3.2 percent last year.

He elaborated the performance of Cement sectors which witnessed the growth of 44 percent in March to clock in at 5.77 million tonnes on an account of a significant increase in domestic consumption and exports.  In addition, improvement in economic activity drove demand for vehicles, therefore, the auto sector saw a 35 percent increase in sales in February when compared to the same period last year.  

‘Both demand and supply-side indicators show a momentum’, Governor added.

Dr Reza Baqir said that the launch of the Roshan Digital account last year is one of the spectacular attempts by SBP that crossed 100,000+ accounts and attracted more than $671 million in six months. This allows Non-resident Pakistanis to open accounts anytime, anywhere without visiting a branch in Pakistan as well as investing in Pakistan Stock Exchange as well.

Nonetheless, he showed his concerns about Pakistan’s growing Debt to GDP ratio during the current fiscal year.

Further, he informed that SBP is working on a new trading bond system. The central bank will issue the new circular to expand the list of primary dealers for the democratization of bond markets. The initiative will make it easier for investors to choose from a wide range of instruments which in turn will further enhance the activity and ultimately improve the liquidity condition of the financial market.

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Posted on: 2021-04-12T12:57:00+05:00