KARACHI: Caretaker Finance Minister Dr Shamshad Akhtar has said that the country’s economic growth will rebound by 2-2.5 per cent in the current fiscal year.

The economic recovery process has boosted business confidence and market sentiments while a bullish trend has been prevailing in the Pakistan Stock Exchange (PSX) for the last five months, she said.

In a virtual address at the IPO Summit 2024 —Empowering the Future of Capital Markets, organised by the PSX on Saturday, she said restoring confidence in the economy and markets in the past few months has been very rewarding not only for me but also for all my colleagues who are well-wishers of Pakistan and are not anti-reforms.

She said the agriculture sector is expected to grow by 5.6pc and industry by 2.5pc in the current fiscal year.

Hopes GDP growth likely to rebound by 2.5pc in FY24

Despite challenges, there has been significant progress in the macro economy, exchange rate and financial stability, Shamshad said.

The Federal Board of Revenue (FBR) is likely to collect Rs10 trillion in FY24 due to restructuring in the FBR as against the set target of Rs9.4tr, while foreign exchange reserves of the State Bank of Pakistan (SBP) have soared to $9.1bn from $4bn when she took over as caretaker finance minister.

She claimed that the SBP was aware that the interest rate needed to come down from 22pc to support economic activities but the rate cut would depend much on deceleration in inflation.

She hoped for a cut in policy rate due to a drop in cut-off yields on T-bills below the central bank policy rate.

The caretaker minister showed her disappointment over a single initial public offering (IPO) at PSX in 2023 after a gap of 15 years. There is also a need to enhance the number of inventors at PSX which has remained stagnant at 200,000 for a long time.

She said the government is laying the foundation for the arrival of more foreign investment after improvement in almost all economic indicators.

“Time has come that we have to think about doing business without taking any loan from the banks,” she added.

PSX Managing Director and Chief Executive Farrukh H. Khan said as against some apprehensions and criticism, good corporate governance actually protects the majority shareholder the most by helping to develop a large-scale sustainable business.

“We don’t have more regional and global scale companies coming out of Pakistan because our entrepreneurs do not leverage the capital markets for growth capital,” he remarked.

Farukh said historically the capital markets in Pakistan have remained small and underutilised by both the private and public sectors, leading to overreliance for funding on the banking sector. “Our economy is running on one wheel and no modern economy can function effectively without large and liquid capital markets,” he added.

Published in Dawn, January 21st, 2024