Pakistan sets 4.4% economic growth rate target: Minister
Islamabad: Pakistan's cash-strapped government has set a target of 4.4 percent economic growth for the coming fiscal year, the finance minister said today, while promising new measures to tackle crippling power cuts.
"We have set the target for GDP growth rate at 4.4 percent," Ishaq Dar told a press conference on the eve of a federal budget presentation in the new parliament which came into being after the country's first transfer of power from one civilian government to another.
The new government of Prime Minister Nawaz Sharif's Pakistan Muslim League-N faces a daunting array of problems ranging from an energy sector crippled by USD 5 billion of debt to dwindling foreign exchange reserves, all the while facing down a Taliban insurgency.
Dar said that the GDP growth rate in the current fiscal year ending on June 30 remained at 3.6 against a target of 4.0 percent.
He said that the fiscal deficit which had run to 4.7 percent would be curtailed by his government through "strict financial discipline".
Dar promised to solve the disrupted payment cycle which has crippled the energy sector with daily power outages from 16 to 18 hours.
"We want to do it in minimum possible period and just finishing off this debt will not solve the problem unless we reduce our line losses or thefts which were more than 30 percent," Dar said.
The government had set a target of eight percent for inflation in the next financial year, he added.
"We are a business-friendly government, but we will not allow industry to make undue profits as it burdens the poor," he said, promising a "corruption-free" government to provide a conducive economic environment.
Dar said that he had no option but to get fresh loan to pay old ones.
"There is no money to make heavy debt repayments by December and I think that in this situation, there is no harm in taking more loan to repay old debt," Dar said.
Pakistan has suffered several years of weak economic growth and its currency has slid in value while foreign exchange reserves have dwindled.
The country is still paying off an USD 11.3 billion International Monetary Fund loan from 2008. Analysts have said it will need to go back to the lender for more to stave off a balance of payments crisis.