December 09, 2006	Saturday	Ziqa'ad 17, 1427

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ISLAMABAD, Dec 8: Commenting on a Dawn report titled ‘Economy facing major risks: WB’ published on Friday, the government has stated that many achievements of the economy have been ignored while mentioning downside risks.

The government said in a statement that Pakistan’s economy had continued to perform strongly, with real GDP growing at an average rate of almost seven per cent per annum over the past four years on the back of wide-ranging structural reforms, financial discipline and prudent economic management despite exogenous negative shocks.

The statement said Pakistan had positioned itself as one of the fastest growing economies in the Asian region and massive spending on the social sector and poverty-related programmes had succeeded in reducing poverty and unemployment.

It said the recent increase in the budget deficit was mainly on account of a large earthquake-related spending which, at best, should be treated as one-off expenditure.

It said that Pakistan had, however, succeeded in reducing fiscal deficit from an average of seven per cent of the GDP to 3.5 per cent in the past six years, resulting in sharp reduction in public debt burden.

It said the recent widening of current account deficit was the result of a sustained economic growth and three-fold increase in the international oil price. “The recent widening of current account deficit is not a Pakistan-specific phenomenon as all the oil importing countries and those growing at a faster pace are experiencing such phenomenon.” Given the current trends, “we still believe that the overall inflation target of 6.5 per cent for the year is likely to be achieved,” it said.