ISLAMABAD: Finance Minister Ishaq Dar said on Sunday the government planned to reduce budget deficit to 4 per cent of gross domestic product (GDP) by exercising strict financial discipline.

The budget deficit, he said, had already been reduced from 8.8 to 5.2 per cent by increasing the revenue by 16 per cent, cutting expenses of the Prime Minister’s House by Rs40 million and abolishing unaudited secret funds of 34 departments, except those of the Inter-Services Intelligence and the Intel­ligence Bureau. Steps were being taken to reduce it further to four per cent.

Addressing representatives of the All Pakistan Newspapers Society (APNS) here, the minister claimed that macroeconomic indicators, such as the one pertaining to the stock market, the value of the rupee and revenue generation had improved considerably.

The government, he said, was striving to tackle the problem of terrorism and trying to improve economic growth and make speedy progress in education, health and energy sectors.

Mr Dar said that foreign exchange reserves had increased to $14 billion. “We took Pakistan to the bond market after seven years and the bond was oversubscribed by 14 times.

“We launched Sukuk bond in the international market, conducted road shows in the Middle East and other countries and were offered $2.3bn.”

He said the Japanese agency JITRO had announced that Pakistan would be the second best choice for foreign investment, while international financial institutions had said the country could become the 18th biggest economy of the world.

“Moody’s has changed Pakistan’s rating from negative to stable, and maintained that if Pakistan remains stable politically and faces less external vulnerability then its rating may further improve,” he said.

“We will try to take foreign exchange reserves to $15bn by Dec 31 so that the country becomes eligible for easy loans from international financial institutions.”

He said the government was committed to ending corruption and ensuring transparency.

The minister claimed that the World Bank, International Monetary Fund, Asian Development Bank, JICA and other organisations had stopped interacting with Pakistan in 2010 because the last government had stopped working on reforms.

Mr Dar said the international financial institutions were predicting that Pakistan would default in 2014 but the PML-N government charted a plan to steer the country out of crises and set a new economic direction.

The previous government, he said, ignored economic growth and revenue generation which increased only by three per cent. “However, we made sure that Pakistan does not default and honours every international commitment,” the minister said.

He said that foreign investment had boosted the economies of India, China, Singapore and Malaysia and in order to attract foreign investment, economic indicators needed to be improved.

The minister said Pakistan had great potential but it had been caught up in a vicious circle. “Everybody has to work hard for the betterment of the country,” he remarked.

Mr Dar said the previous government had given subsidy of Rs600bn to even the industrial, commercial and other consumers who could afford to pay full electricity bills.

Published in Dawn December 8th , 2014