KARACHI: Mr S.A. Hasnie, Governor, State Bank of Pakistan, while surveying the economic situation, which, he said, was characterised by unusual buoyancy, impressive increase in agricultural and industrial production and a pronounced rise in the rate of growth, cautioned yesterday against the hazards of rapid monetary expansion and a sense of complacency about agricultural output which needed a real break-through.

He pointed out the difficulties in the process of absorption of foreign aid and loans, and stressed the need for a shift in the emphasis from import substitution to export orientation and for “a more equitable distribution of the fruits of economic development” in accordance with the Islamic concept of social justice. Mr Hasnie, who spoke at length at the 16th annual general meeting of the shareholders of the State Bank of Pakistan, referred to a record rise in the money supply which was of the order of Rs88.16 crores in 1962-63 and Rs100.21 crores in 1963-64. This increase, he maintained, has pushed the economy on to “a higher plateau”. “We seem to have reached a stage,” he observed, “when monetary expansion, if allowed to continue at the present rate, is likely to slow down our economic progress and increase dependence on foreign assistance”.

Published in Dawn, September 2nd, 2014