Pakistan\\\'s economy is on \\\'the right track\\\'

The sound economic policies and management of the government of Pakistan have resulted into a notable progress in the country's economic performance in the last one year. In fiscal year (FY) 2013-14, for the first time in the six years, economic growth rate of over 4.0 per cent (4.14 per cent) was achieved.  Pakistan rupee also remained stable vis-à-vis the US dollar. The foreign exchange reserves increased to US$14.11 billion (with US$9.09 billion as State Bank of Pakistan or SBP component) on June 30, 2014. Budget deficit was reduced from 8.2 per cent in FY 2012-2013 to 5.7 per cent in FY 2013-14. The Consumer Price Index (CPI) inflation as kept in single digit at 8.6 per cent in 2013-2014.
The world renowned credit rating agency, Moody's, in recognition of Pakistan's improved economic performance, raised Pakistan's outlook from negative to stable. The Japan External Trade Organisation (JETRO) declared Pakistan as second in the world in term of business growth of Japanese companies. According to Goldman Sachs' Jim O Neil, famous for coining the term BRIC, Pakistan would be the World's 18th largest economy by 2050 with GDP of US3.33 trillion. Pakistan's current position is 44th.
Pakistan benefited from the improved economic indicators and ratings. It successfully issued Eurobonds worth US$2.0 billion, after a seven-year absence from the international capital market, secured international funding for Dasu Hydropower Project and auctioned the radio spectrum license of 3G and 4G which achieved the target of Rs. 120 billion receipts against the target of Rs. 79 billion set last year. After a long interval, the multilateral partners like the World Bank (WB) and Asian Development Bank (ADB) resumed normal business with Pakistan. A 36-month programme for US$ 6.64 billion was finalized with the International Monetary Fund (IMF). The Islamic Development Bank has also agreed to a loan of Euro 750 million and a trade facility of US$ 150 million.
Domestically, the large-scale manufacturing witnessed a growth of 4.12 per cent during FY 2013-14 and credit flow to private sector increased to Rs.379 billion in FY 2013-14 from negative 19 billion in FY 2012-13. Credit to the agriculture sector also increased by 15.91 per cent to Rs. 390 billion in FY 2013-14. With 48.89 per cent growth during the year, the Karachi Stock Exchange (KSE) Index reached record level of 29,653 points on June 30, 2014 (29,906 on October 20, 2014). Market capitalisation increased by 44.44 per cent to Rs. 7.28 trillion in FY 2013-14 from Rs. 5.04 trillion in FY 2012-13. In US dollar terms, the increase was 43.85 per cent (US$ 51.3 billion to US$ 73.8 billion). The number of incorporated companies stood at 4,587 in FY 2013-14 against 3,953 in the previous year - a 16.03 per cent growth.
As a result of the tax reforms introduced by the government and efforts made to widen the tax net, the revenue collection by the Federal Board of Revenue increased from Rs.1,946 billion in FY 2012-13 to Rs. 2,266 billion in FY 2013-14. The number of taxpayers also grew by 100,000 in FY 2013-14. The government's historic decision to publish Parliamentarians Tax Directory and General Tax Directory made Pakistan one of the only four countries of the world to do so.
The government also raised Public Sector Development Programme (PSDP) from Rs. 360 billion in 2012-13 to Rs. 441 in FY 2013-14. PSDP for the current financial year is budgeted at Rs.525 billion. It allocated Rs.118 billion to National Income support Programme (NISP) for the less privileged households in FY 2013-14 against Rs.40 billion in FY 2012-2013. The monthly stipend was also raised to Rs. 1500 per month from Rs. 1000 per month along with the number of beneficiaries from 4.1 million to 4.8 million. This number will increase to 5.3 million.
The European Union (EU) granted Generalised System of Preferences (GSP) Plus status to Pakistan with effect from January 01, 2014. Under the Scheme, Pakistan exports will benefit from duty-free access to the EU market. When such a facility was granted to Pakistan in FY 2002-2005, its exports to the EU increased by nearly US$ 2.0 billion. In 2012, Pakistan exports to the EU stood at US$ 5.97 billion. It is estimated that duty-free access under the GSP Plus Scheme has the potential to increase Pakistan exports to the EU to approximately US$ 7.5 billion.

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