ISLAMABAD, Nov 10: Prime Minister Shaukat Aziz on Wednesday asked the business community to take advantage of the 'feel good' environment prevailing in the country.
"Take advantage of the feel good environment prevailing in the country, take advantage of rising consumer demand in the society, come forward and invest more," he told the Pakistani businessmen and industrialists he invited at an iftar dinner.
All the economic indicators are improving he said adding that: "On the whole we have been doing just fine so far and there are indications that like last year, we will over perform in many areas this year as well."
He informed the gathering that the budget deficit of the first quarter in the current fiscal year has reduced to Rs22 billion as compared to the last year's Rs40.9 billion.
This performance was achieved on account of over performance of the Central Board of Revenue (CBR), which collected taxes amounting to Rs125.7 billion in the first quarter of the current year - Rs13 billion more than the target of Rs112.7 billion.
This amount is 33.6 per cent more than last year's collection in the same quarter.
The prime minister, however, conceded that Pakistan was witnessing two pressure points, inflation and exchange rate.
Inflation is relatively high owing to demand and supply side pressures, but the government has taken measures to contain it, he said.
"We have been successful so far and as we move forward, we will witness a deceleration in inflation in coming months," the prime minister assured the gathering. The government would maintain a stable and strong exchange rate consistent with the country's macroeconomic fundamentals, he said.
On November 1, when market opened, the exchange rate was Rs61.35 per US dollar. Today it is Rs59.62 per US dollar because of the measures the government took, he said.
Worker's remittances have been a major source of foreign exchange earnings of the country. During the first quarter of the current fiscal year we have received $983 million - 8.9 per cent more than last year.
Similarly, foreign direct investment continues to exhibit rising trend. During the first quarter, "we received $181 million as against $117 million in last year."
"We have also received $21 million in portfolio investment as against an outflow of $28 million last year," the prime minister said.
The private sector is taking full advantage of the conducive macroeconomic environment prevailing in the country, he said adding that last year the private sector had borrowed Rs325 billion from the banking system. That momentum has further been accelerated during the current fiscal year, he said adding that in three and a half months of the current fiscal year, the private sector borrowed Rs83 billion against Rs54 billion for the same period last year.
Exports and imports have also grown by high double-digit during the first quarter of the current fiscal year. What is needed is to maintain this trend in the coming months, he emphasized.
He assured the businessmen and industrialists that consistency and continuity in the economic policies would be maintained while the partnership relations, the government had developed over the last five years between the public and the private sector would further be strengthened.
He, however, said that both public and private sector would have to play their respective roles in improving the competitiveness of our industries. Relatively cheap labour, low cost of capital, a strong macroeconomic environment represented by a stable exchange rate, relatively low inflation and strong growth, reduction and rationalization of tariff to reduce the cost of imported raw material, reduction in electricity and telephone charges are some of the measures the government has taken to reduce the cost of doing business in Pakistan, he explained.
"Our philosophy about the government is that government should not be in the business of doing business, he observed. The job of the government is to facilitate the work of the private sector by removing irritants by providing better infrastructure, he said.