State Bank of Pakistan Governor Dr Reza Baqir said on Friday that the country’s economic conditions were improving with GDP growth rate expected to be between four to five percent in current fiscal year.
Addressing a press conference in Islamabad, Baqir said that all short-term indicators showed that the stabilization phase had ended and Pakistan’s economy was now “firmly in the growth stage”.
“After stabilisation, [Pakistan’s economy] shifted towards growth and the proof is in front of you in the form of 4pc growth. All short-term indicators — auto sales, cement sales, electricity consumption and fast-moving consumer goods — are showing that we are firmly in the stage of growth.”
“The country showed the international community that it controlled two reasons for problems — current account deficit and fiscal deficit,” he added.
The SBP chief said that the country’s economy was recovering and the foreign exchange reserves of the central bank would reach to the historic high level once the country receives $2.77 billion on August 23 from International Monetary Fund. Pakistan is due to receive a $650 billion in lieu of general allocations, approved to boost global liquidity amid the coronavirus pandemic.
Earlier, the highest reserve position of $19.5 billion was recorded in year 2016, Baqir said.
The SBP Governor appreciated the IMF’s step for providing global liquidity, saying that this was good news and it would help improve country’s reserves and will have very positive impact on various economic indicators.
Baqir hopes the increase in reserves would help provide coverage to imports into the country, saying that since Pakistan was currently in recovery mode, it needed more imports.
The inclusion of $2.77 billion would also help enhance the net international reserves of the country, said the SBP governor adding that this is also positive sign for the country’s economy.
Talking about the current account deficit, Baqir said the current account deficit was projected to be 2 to 3 percent of GDP this fiscal year.