Caretaker govt unable to choose ministers despite economic slowdown

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ISLAMABAD: Despite the downslide on the economic front, the caretaker government has so far unable to finalise the names of economic ministers to steer out the economy from existing morass, sources said on Monday. Names under consideration for the slot of finance minister include Dr Hafeez A Pasha, Dr Ishrat Husain, Khawaja Iqbal Hassan, Razi Ur Rehman and some others but it is not yet confirmed when the government is going to finalise the names.

When contacted, the press secretary to the prime minister did not give any timeframe but said that the premier would finalise the names of cabinet ministers soon. However, sources said that two names Razi Ur Rehman, former chairman of the Securities and Exchange Commission of Pakistan (SECP), and Khawaja Iqbal Hassan, former president of the NIB Bank, have been floated by a senior official for these top slots.

Sources said that the real issue is the nomination of ministers for finance, foreign affairs and interior as the country is passing through difficult times. Exports registered negative growth of 0.9 percent, while remittances growth slowed down in a major way, the sources said, adding that the remittances growth, which has saved Pakistan from the balance of payments crisis, plummeted by almost half as it went up to 15 percent growth but now declined to seven percent in February.

But whosoever will be assuming the slot of the finance ministry, he will have to take a decision regarding approaching the International Monetary Fund (IMF) for obtaining a bailout package. Pakistan has been left with no other option but to seek the IMF’s loan package to avert the balance of payments crisis after May when Islamabad is going to pay $534 million to the IMF just in one month.

Pakistan has so far lost $2.8 billion in the foreign currency reserves held by the State Bank of Pakistan (SBP) in the wake of repayments of $1.8 billion to the IMF and negative financial account of $1 billion. By taking into account cash currency reserves, the gross foreign exchange reserves held by the SBP stood at $9 billion by February and would touch $6 billion by the end of the current fiscal year.

Currently, the foreign exchange reserves of the SBP stood at $7 billion and Islamabad will have to pay $1 billion in the last three months (April-June) of the current fiscal year so the reserves will decline to $6 billion, the sources said. The financial account stands at negative $922 million and the current account deficit is almost doubled as compared to the projection of the finance ministry as currently it is at over $700 million.

Although, foreign direct investment (FDI) increased by $200 million, increased repayment of loans has offset its positive impact on the balance of payments position. On growth prospects, the sources said, the recent rains in various parts of the country has negatively impacted wheat production because it will not provide proper heat to wheat grain and might impact its production by almost one million tons.

Overall GDP growth, which has been estimated in the range of four percent for the current fiscal year, could be impacted by 0.3 percent if wheat production declined by one million tons as the government has estimated wheat production of 25 million tons but after the recent rains, the estimates might go down to 24 million tons.

 

Courtesy: The News


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