Karachi: Finance Minister Asad Umar has said that Pakistan's economy will turn around in the third year of the current pakistan tehreek-e-insaf's government and the worst is over for country's beleaguered economy. I think year three (FY21) will be the break even point and there onwards you will see growth on the basis of which this will be the last IMF programme, Asad Umar said at the Pakistan Stock Exchange (PSX).
He estimated a 33% drop in the current account deficit to $12 billion in current fiscal year 2019 compared with a record high of $18 billion in FY18. We have taken monetary measures, have started taking fiscal measures. After doing all this, I think the financing gap (current account deficit) this year will be $12 billion, he said.
The average current account deficit dropped by half to $1 billion a month in August and September 2018 compared with $2 billion a month previously. The visit to the PSX came after weeks of volatile trading at the Stock Exchange. Stocks had taken a beating as the index plummeted to a 28-month low recently. If the economy will grow, the market will grow, he said.
Asad Umar said the financing gap would further drop in FY20. We are trying to overcome this $12-billion gap through a structural package, which will include one-time inflows from the IMF. We will 100% cover the $12 billion gap, he reiterated.
He said, the government has taken policy measures to fix the beleaguered economy. You will see a healthy growth in exports this year. In the first quarter, exports are up, imports are down and remittances are 13% up. The worst is over for Pakistan's economy, he remarked, adding, it had evolved over the past three years and Pakistan was on the way to bankruptcy.
Earlier, talking with PSX's senior members and board of directors in a meeting, Asad Umar said, the IMF loan agreement is likely to be signed before or immediately after the winter break. If the IMF bailout programme gets delayed for one reason or the other, it will create no panic on the balance of payments front. We have arrangements for foreign payments for up to February 2019, he added.
He assured the gathering of stockbrokers and traders that the government would work on improving Pakistan's ranking in the ease of doing business to 99 from the current 147th place. For this purpose, his government has set up the Council of Business Leaders. The council under the leadership of Adviser to Prime Minister on Commerce, Abdul Razak Dawood has been tasked to look into the matter and suggest measures.
The minister assured stockbrokers and traders of reviewing the high taxes on trading of shares and regulations in PSX. He has agreed with PSX board in principle to allow investors to carry forward losses to be adjusted in the following years against 15% CGT (Capital Gains Tax) charged on shares sales.
Valuation issues in real estate impact the whole economy. It needs to be fixed. It should be changed fundamentally. If the whole process of real estate price discovery and disclosure is fixed, it would automatically solve market (PSX) problem, he said.
He also agreed to consider reducing presumptive tax, which at present stands at 0.02% on shares turnover and paid by stockbrokers. Asad Umar also agreed with stockbrokers to re-introduce group taxation regime to help building more conglomerates.
The minister also asked the Securities and Exchange Commission of Pakistan (SECP) to resolve all pending issues within two weeks including allowing increased trading on futures counter, facilitating buy back and treasury stocks.
Posted by : Admin on Oct 21, 2018 03:33 PM
