Dar chairs meeting to review external account position

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ISLAMABAD, Aug 21 (APP):Finance Minister, Senator Mohammad
Ishaq Dar, chaired a meeting at the Ministry of Finance on Monday to
review the external account position, including the current account,
trade account, exports, imports, remittances and financing.
The meeting was attended by Minister for Commerce,Mohammad
Pervaiz Malik, Finance Secretary, Secretary Commerce, Secretary
Textile Industry and senior officials of the Ministries of Finance,
Commerce, Textile Industry, as well as the State Bank of
Pakistan,said in statement issued by Ministry of Finance here.
The Finance Secretary gave a briefing to the meeting and
explained that the recent increase in the current account deficit
was largely driven by a sharp increase in imports of machinery for
power generation, textile construction and import of petroleum
products.
He said that these were healthy imports which will increase
the production capacity of the economy, and enable higher growth and
exports in the future.
He also stated that the decline in exports in the last few
years was mainly due to global economic conditions, energy shortages
for industrial and agriculture sectors, and reduced availability of
exportable surplus.
The Finance Secretary informed that, due to improvement in the
global economic outlook, uninterrupted supply of electricity and gas
to industrial sector and increased output, the export decline had
begun to bottom out as exports during Jan-June 2017 registered a
growth of 0.52% compared to the same period last year.
He highlighted that exports in July 2017 posted a healthy
growth of 10.5% compared to July 2016.
He also highlighted that workers’ remittances, which had
remained stagnant due to global conditions, have shown an impressive
growth of 16% in July 2017 compared to July 2016.
A detailed discussion on various options to give an immediate
boost to exports, manage imports and build on the recent month’s
growth in remittances was held during the meeting.
The Finance Minister said that a significantly higher export
target should be achieved to improve the trade deficit.
He said that the export incentive package announced by the
government earlier this year was fully endorsed by the industry, and
all effort should be made to achieve the growth targets set under
this package.
The Finance Minister directed the Finance Secretary, Secretary
Commerce and Secretary Textile Industry to remove any impediment
that may hinder the achievement of this target.
Comprehensive proposals to incentivize remittances were also
discussed in detail.
In this regard, the Finance Secretary said that several
meetings have been held with the stakeholders, and various measures
have been identified including the proposed remittance scoring card,
road shows in major corridors, transaction efficiency and settlement
of TT charges.
Finance Minister emphasized that remittances were an important
foreign exchange stream for the country, and directed that the
proposed initiatives in this regard should be finalized immediately.
He also highlighted the need to incentivize overseas
Pakistanis to invest in Pakistan.
The meeting was also briefed on various financing measures to
finance the current account deficit in the short term.
It was explained that increased inflows of Foreign Direct
Investment and other investments under CPEC will largely fill this
gap.
Other options such as tapping of capital markets and trade
finance facilities were also discussed.
The Finance Minister said that the economy was passing through
an expansionary phase, and the resultant dividends for the country
will be much higher than the cost presently being borne as a result
of widening of trade deficit which is only a short-term phenomenon.