I extend my heartiest congratulations to the management of Economic Affairs Magazine on publishing a special edition on 75 years of independence of our homeland Pakistan. This magazine has always been a great source of providing keen economic insights on the policies undertaken by the government for the betterment of the economy. This year, we are celebrating 75th year of our independence. Being the Finance Minister of Pakistan, it is appropriate for me to begin by discussing the economic condition that we inherited when we came to power.
Unfortunately, Pakistan’s economy was in the worst recession at the time I was assigned the responsibility of Finance Minister of Pakistan a few months ago. Exports were plummeting, imports were surging, the current account deficit was widening, debt was mounting, and fiscal space was shrinking relentlessly. Exchange rate stability seemed a hard nut to crack. So overall economy was sluggish. These were really challenging times and Pakistan’s economy was on verge of a severe economic crisis.
With prudent and pragmatic policies and programs of the present government, within a short span of time, we successfully averted the economic crisis. This is the strongest economic rebound achieved so far.
Surging inflation was one of the major macroeconomic challenges. However, it is imperative to mention that currently inflation is a global phenomenon and no single state is responsible for it, neither any single country can insulate itself from inflation in present times. Because due to post-pandemic impacts and the Russia-Ukraine conflict, global supply chains have been disturbed causing a shortage of fuel, food and pushing up prices of many other commodities as well. So far, a number of concrete and tangible steps have been undertaken by the present government to control this ghost of rising prices and a number of measures were also taken, at the same time, to provide relief to the masses.
SOEs have become white elephants for the state of Pakistan, mostly running on the government exchequer. Privatization of these SOEs in a transparent and optimal way is a gigantic task for any government. The present government is working on various feasible proposals in this regard and will soon share good news with the public.
The present government is cognizant of the sufferings of the people, especially economic hardships. Significant steps have been taken for minimizing the economic hardships of the common people and the challenges they face.
Presently, a number of policies are underway to significantly reduce the debt-to-GDP ratio. For achieving this objective, it is being ensured that there exists sound coordination between the fiscal and monetary policies of the country. On one side, on the fiscal policy front, there is a focus on reducing the non-developmental spending of the government while on the monetary front, the interest rates are kept high to control the inflationary tendencies present in the economy. In the same way, through fiscal policy, taxes are being imposed on imports of luxury goods while the money supply is kept in check through monetary policy tools.
Till now, the present government has successfully managed the exchange rate, widened exports, reduced imports, enhanced the social safety net, and restarted stalled IMF program. But still, there is a long way to go and of course, sustaining this positive economic growth is the ultimate for the economy of Pakistan. Slowly and steadily, we are moving toward an economy where people can have access to a sound public transport system, can earn a decent living, can enjoy an affordable lifestyle, and can have access to quality education and health infrastructure.
I once again congratulate the management of Economic Affairs on publishing a special edition and hope that this magazine will help foster the government’s economic policies and programmes for the masses.
Mr. Miftah Ismail
Pakistan Rupee Exchange Rate