ISLAMABAD, Jun 23: Underlining the importance of a strong and well-functioning financial and banking sector for sustained higher economic growth, Prime Minister Shaukat Aziz on Friday said the banking industry in Pakistan, which had been transformed from the state-owned sector into a vibrant private sector industry, had not only gained strength from the positive interplay of economic and political factors, but had also become an engine of growth for the economy.

The prime minister was talking to Niall Booker, regional head for Middle East of HSBC, who called on him here at the Prime Minister's House.

Mr Aziz said Pakistan, with its growing market, strong economy and an emerging middle class, offered immense opportunities for business and investments.

Niall Booker said HSBC was impressed by the economic turnaround achieved by Pakistan and had decided to open more branches and expand their area of business in Pakistan. He said HSBC had opened one branch in Islamabad and would be opening one each in Karachi and Faisalabad.

The prime minister said as a result of the economic and structural reforms, the economic landscape of Pakistan had changed altogether, adding that Pakistan's economy exhibited solid economic growth in 2005-06 despite the surge in oil prices and the devastating earthquake of October 8, 2005.

The prime minister said increase in per capita income to $847 and sharp pickup in overall investment were reaching new heights, adding that private sector investments were buoyant and a robust consumer spending was ably supporting the ongoing growth momentum.

“Energy consumption continues to rise at a greater pace reflecting strong buoyancy in the economy,” Mr Aziz added.

Referring to various reforms, the prime minister particularly mentioned the Fiscal Responsibility Law as an important step taken by the government to maintain fiscal discipline by putting restriction on borrowing beyond a certain point.

Mr Booker said his bank was satisfied with the level of ease of doing business in Pakistan. He also appreciated the quality of human capital available in the country and added that addition to opening more branches in Pakistan, the bank is also expending its areas of business. He said from the corporate sector, the bank would be moving on SMEs and other areas, including Islamic finance.—APP