1、0Outline of PresentationuKey Macroeconomic Challenges of the 1990suHow did we address those challengesuWhere Are We Now?uWhere do we want to see Pakistan in the next five yearsuKey Macroeconomic targets for the next five yearsuNew ChallengesuHow to address new challengesuConcluding remarks1Overcomin
2、g macroeconomic challenges 1990s Macroeconomic ScenarioMacroeconomic imbalances leading to buildup of public debt,deceleration of growth and investment,and stagnation in exportsChallenges of the 90sImprove macroeconomic environmentBring debt situation under controlRestore investor confidenceRevive e
3、conomic growthRestore financial sovereignty2000-onwards:Two-pronged Strategy followedPolicies pursued to strengthen macroeconomic environmentIntroducing wide-ranging structural reforms2Policies pursued to strengthen macroeconomic environmentReducing“Twin Deficits”Keeping inflation lowBuilding foreig
4、n exchange reservesMaintaining stability in exchange rateMaintaining consistency and continuity in policies3Strong commitment to reform agendaMajor economic reforms4nImproved external balance of payments nIncreased foreign exchange reservesnExports growing at double-digit ratesPakistans economy has
5、made significant progress during the last six years nTransparent and predictable economic policiesnReform policies institutionalized,ensuring continuitynConfidence of the private sector restored nInflows of remittances surgednFiscal and current account deficits lowerednDeclining domestic and externa
6、l debt burdenWhere Are We Now?6Robust Economic GrowthReal GDP growth(%yoy change)Source:Federal Bureau of Statistics6.57.07Per Capita Income($)Per Capita Income Continues to RiseSource:Federal Bureau of Statistics8New Jobs CreatedLabour Force SurveyEmployment (in millions)Number of New Employment (i
7、n millions)FY 0036.82-FY 0239.052.23FY 0442.012.96FY 06(Q1)47.555.54Source:Labour Force Survey,FBS 9Reduction in PovertyArea2000-012019-05Changes(%Points)Overall32.125.4-6.7Rural39.031.8-7.2Urban22.717.2-5.5Source:Center for Research on Poverty Reduction and Income Distribution(CRPRID)10Foreign inve
8、stmentForeign Investment(US$million)including Privatization ProceedsSource:SBP11Net Credit Flows to the Private Sector12BanksFuel&EnergyNon Energy Non BanksRising Profitability Driving GrowthRising Profitability Driving GrowthSource:KSE13Currency stabilization and buoyant stock market reflects optim
9、ism in the Pakistan economySource:BloombergExchange rate(PKR/USD)Pakistans Karachi Stock Exchange Index-10014Improving budgetary positionOverall fiscal deficit(%of GDP)Source:Ministry of Finance 15Growing Revenue Collection helps boost up the economyIncrease Revenue Collection(Rs.Billion)Source:Mini
10、stry of Finance&CBR CBR Revenue16Overall interest payment ratios have improvedInterest Payments(As%of Total Revenue)Source:Ministry of Finance17Low inflation has provided monetary flexibilitySource:FBSInflation(%)(Base year 2019=100)18Month-wise Trend in InflationSupply Side ActionsProjected19Region
11、al Price Comparison of Essential CommoditiesSource:FBS&Ministry of CommerceCOMPARISON OF PRICES OF ESSENTIAL HOUSEHOLD BUDGET ITEMS WITH REGIONAL COUNTRIES in Pak RupeesS#ItemsUnitIslamabadNew DelhiKabulTehran28/03/0627/03/0619/03/0622/03/061WheatKG11.8819.1818.15-2Wheat FlourKG13.2419.1824.20-3Rice
12、 BasmatiKG22.6327.4042.3582.164Moong PulseKG49.6765.7660.5039.435Mash PulseKG56.0271.2460.50-6Masoor PulseKG43.9643.9260.5059.157Gram PulseKG31.7941.1060.5052.588OnionKG11.0710.9618.1529.589TomatoesKG14.9916.4436.5029.5810GarlicKG58.0261.3772.0052.5811Chicken FarmKG55.6568.50121.0092.0112MuttonKG196
13、.56191.80266.20427.2013SugarKG36.0331.5131.4639.4316/03/0610/3/201919/03/0622/03/0614Diesel Litre37.2542.5434.001.0515Petrol(Super/Octane 90)Litre56.3661.3836.305.2616Kerosene OilLitre37.5049.3239.001.0820Money Supply,Inflation&GrowthMoney Supply,Inflation&GrowthM2Nominal GDPInflationReal GDP21Low i
14、nterest rates encouraged private investment and fuelled growthWeighted Average Lending Rate(%per annum)Source:SBP22Exceptionally strong external liquiditySource:SBPImports and Exports(US$million)23As confidence in the economy builds,remittances from abroad have risen sharplySource:SBPRemittances(US$
15、million)24Current account(%of GDP)Current account deficit remains under controlSource:SBP25Financial Flows(Million$)2019-062019-05uPrivatization Proceeds1645 363uGrants 637 231uCapital Markets1500 600uProject&Program Aid2893 2044uForeign Investment1850 1676Total 8525 4914uCurrent Account Deficit -53
16、53-1753uAmortization-1042-1434uOther Payments-416-1500Total-6811-4687Addition to Reserves 1714 227 Source:Ministry of Finance 26.aided by a phenomenal buildup in FX reservesSource:SBPForeign exchange reserves(US$billion)Debt Profile of Pakistan28PUBLIC DEBT(As%of GDP)Source:Debt Office,Ministry of F
17、inance 29EXTERNAL DEBT AND LIABILITIES(%of Foreign Exchange Earnings)Significantly reducing vulnerability to external shocksSource:Debt Office,Ministry of Finance 30INDICATORS OF DEBT BURDENSource:Debt Office,Ministry of Finance 31INDICATORS OF DEBT BURDENSource:Debt Office,Ministry of Finance Pakis
18、tans EconomyIn the Next Five Years33Pakistans Economy in the Next Five YearsuStrong Economic Growth Ranging between 6 8%p.a.uStable Macroeconomic EnvironmentuDebt Burden Reaching Sustainable LeveluLives of the Common Man ImprovinguSocial Indicators ImprovingKey Macroeconomic TargetsFor The Next Five
19、 Years35Key Macroeconomic Targets for the Next Five YearsSustainable Budget Deficit Ensuing Macroeconomic StabilitySource:Ministry of Finance 36Public Debt Attaining SustainabilityKey Macroeconomic Targets for the Next Five YearsSource:Ministry of Finance 37Country No Longer Vulnerable to External S
20、hocks:External Debt As%of GDPKey Macroeconomic Targets for the Next Five YearsSource:Ministry of Finance 38Investment as%of GDP RisingKey Macroeconomic Targets for the Next Five YearsSource:Ministry of Finance 39Pakistan on a higher Growth TrajectoryKey Macroeconomic Targets for the Next Five YearsS
21、ource:Ministry of Finance New Challenges41Second generation reformsSecond generation reformsImproving competitiveness of industryFacilitate expansion and increased role of private sectorFurther strengthening of tax administrationPromoting transparency in economic policy makingJudicial reform,Police
22、Reform and Civil Service ReformStrengthening institutions32Building robust financial systemFurther strengthening of tax administration42Continuing Economic Agendai.Curtailing High Energy CostsPower Sector ReformsHydel PowerGas PipelinesReforms of Oil and Gas industry ii.Removing Water ShortagesWater
23、 ReservoirsManagement of Water ResourcesEfficient Usage at the Farm Level43Continuing Economic Agendaiii.Improving Logistics&Removing Supply Chain ConstraintsNational Trade CorridorRetail&Wholesale Markets DevelopmentPorts ModernizationModernizing Transport Fleetiv.Unlocking the Land BankNIPs(Nation
24、al Industrial Parks)Release of Government Land(Defence,Railways,Provincial Governments etc.)Computerization of Land Transactions44Continuing Economic Agendav.Removing Skills Gap&Enhancing ProductivityNTEVTA5 New Engineering Universities&HEC InitiativesEducation Sector Reformsvi.Boosting Agriculture
25、Sector DevelopmentLivestock SectorFisheriesHorticulture&Value Added AgricultureResearch&Extension ServicesYield Enhancement45Continuing Economic Agendau Tourism&Hotel Industry Expansionu SMEs&One Village One Productix.Sustaining Industrial Development Beyond Textilesx.Developing Knowledge Based Indu
26、stry&Outsourcingxi.Strengthening Growth Prospects of Service Sectorxii.Obtaining Preferential Access to Global Markets 46ConclusionsEconomy Continues to Grow StronglyReduction in UnemploymentGrowing Profitability of Private SectorRobust Banking SystemStrong Growth in Diversified SectorsVibrant Telecom SectorStrong Domestic&External Demand Sustaining Economic GrowthGrowing opportunities in InfrastructureGrowing Role of the Private sector
