KARACHI: Exports grew 13.2 per cent in the last three months, indicating that their declining trend has finally reversed, State Bank of Pakistan Governor Tariq Bajwa said while addressing a delegation of the Pakistan Business Council on Friday.

He said major external indicators were positive in the first two months of 2017-18. The governor said the pace of expansion in the economy accelerated for the third consecutive year in 2016-17 amid an improving security situation and better energy supplies. The economy grew 5.3pc in 2016-17 compared to 4.6pc in the preceding year.

Mr Bajwa pointed out that the accommodative monetary policy has played a key role in boosting private-sector credit demand. The policy rate came down to 5.75pc from 10pc in October 2014. Record-low interest rates were instrumental in the increase of private credit in 2016-17, he said.

The overall expansion in private credit stood at Rs747.9 billion in 2016-17. “About 40pc of the expansion in credit was meant for fixed investment,” he added.

A much lower net retirement in private-sector credit of Rs75.5bn from July 1 to Sept 1 compared to a net retirement of Rs224.3bn a year ago indicates that the private sector has borrowed more credit in 2017-18 so far.

“In terms of agriculture, we are a low-productivity economy and the SBP is doing whatever it takes to improve that,” he said. The availability of credit is one aspect, he said. The government had set a target of Rs1,001 million, but that was a broad target, he added.

“Though the last year’s target was largely met, the number of borrowers has actually gone down,” he said. It implies that money was going towards processing, not production, he noted.

Published in Dawn, September 16th, 2017