|
|
|
| November 27, 2005 | Sunday | Shawwal 24, 1426 |
Foreign grants won’t trigger inflation, says minister
HARIPUR, Nov 26: Minister of State for Finance Omar Ayub Khan said on Saturday that the inflow of foreign grants following last week’s international donors’ conference would not contribute negatively to the existing inflation rate in the country. “Inflation is the ultimate result of flow of cash amounting to Rs157 billion to the rural parts of the country,” Mr Khan told newsmen at his Haripur office. “The present ratio of 7.5 pc inflation will not, hopefully, register an upward trend,” Mr Khan said.
On Saturday, the state minister distributed 140 tents among the quake-affected families of Haripur.
Asked whether the inflow of $5.8 billion in Pakistan for rehabilitation and reconstruction of earthquake-hit areas would not trigger inflation, he said emphatically that foreign assistance pledges would not have any negative impact on the country’s present rate of inflation.
Attributing the present inflation to the flow of cash to the rural areas owing to wheat support prices and fluctuation in oil prices, he said that there was no such threat to the country this time around.
Mr Khan said that out of the total pledges of $5.8 billion, there was a big chunk of $3.9 billion as soft loans payable in 40 years at the rate of 0.5 pc mark-up, while $1.9 billion was in the shape of grants from different donor countries.
The minister insisted that these assistance pledges would have no negative impact on the payable foreign loans and cause no harm to future budgets.
In reply to another question, he said the PSDP was reviewed quarterly and funds transferred to fast-moving projects from slow-moving ones, but there was no cut made in the allocations of PSDP or poverty alleviation funds following the Oct 8 earthquake. “The country will not face any financial problem now that foreign aid pledges have been made.”, he said.
About rehabilitation and reconstruction of devastated areas, Mr Khan said that $600 million would be spent on revitalization of the agriculture sector in the quake-hit areas. Giving a brief outline of the rehabilitation programme of the government, he said that funds were being directed towards livelihood security projects like tea, fruit, vegetable production, development of tourism, dairy products by installing milk chilling plants.
About uplift schemes in Haripur district, the state minister said that six underpasses for Haripur city had been approved, while work on these projects would start very soon.
He said that a tent village would be established in Haripur for the affected people of Balakot, Kiwai, Kaghan and other areas.
|
|
|
|
