Pakistan’s Economy Stepping Up To Future Challenges

Despite challenges, Pakistan’s economy contin ued to pick up in the first three quarters of cur rent fiscal year July-March 2015-16, as reform and stabilization measures resulted in higher foreign exchange reserves, low inflation and low fiscal deficit as compared to same period of last fiscal year. The majority of economic indicators is positive and is showing marked improvement during the first nine months of current financial year. Federal Board of Revenue (FBR) during Ju ly-March 2015-16 had collected a provisional revenue of Rs 2,103 billion as compared to Rs 1,753 billion realized during the same period of last fiscal year, showing a growth of around 20 per cent. Similarly, remittances sent by overseas Pakistanis during July-March of current finan cial year were $14.158 billion as compared to $13.595 billion remitted in the same period of last fiscal year, showing a growth of 4.14 per cent. The fiscal deficit has come down to 3.2 percent during July-February 2015-16 com pared to the fiscal deficit of 3.3 percent of same period of last fiscal. As many as 4,355 companies were incorporated during July-March 2015-16 during current year compared to the incorporation of 3,591 compa nies, a growth of 21.28 percent. Another impor tant indicator, the Large Scale Manufacturing also grew by 4.12 percent from July-January (2015-16) compared to growth of 2.51 percent during the same period of last year. The credit to private sector (flows) expanded by 107.73 per cent and reached to Rs. 370.8 billion from July 1 to April 1 (2016) compared to flow of Rs.178.5 billion during last year. The Agriculture credit disbursements has also increased by 15.25 percent by growing from Rs 288.74 billion in July-February (2014-15) to Rs 332.78 billion in July-February (2015-16). The spending on development has been recorded at Rs 353.28 billion from July 1 to March 18, 2016, compared to spending of Rs.249.98 bil lion in July 1st to March 20 of same period of last fiscal. The Foreign Direct Investment into the country witnessed by 4.8 percent by grow ing from $716.2 million during July-February (2014-15) to $750.9 million during the current year. However, the imports into the country dur ing July-March were recorded at $32.515 billion compared to $33.948 last year, showing nega tive growth of 4.22 percent. On the other hand, the exports from the country also declined by 12.92 percent by falling from $17.921 billion last year to $15.606 during the ongoing fiscal year. Based on the figures, the trade deficit witnessed positive growth of 5.5 percent by going up from the deficit of $16.027 billion last year to $16.909 this year. Moreover, low international oil prices have created enormous opportunities for Pakistan to give a big push to oil and gas exploration efforts. Pakistan’s petroleum policy still offer a reasonable incentives to foreign oil and gas firms despite dip in oil prices following a cut in cost of service, technology and manpower. Pakistan has opportunity to take advantage of the international recession in oil and gas prices as the costs of services and technology related to exploration and development had significantly dropped.