FUTURE OUTLOOK AND CHALLENGES FOR PAKISTAN’S ECONOMY
FUTURE OUTLOOK AND CHALLENGES FOR PAKISTAN’S
ECONOMY
Ishrat Husain
H.E. Dr. Maleeha Lodhi, Mr. Anjum Iqbal, Distinguished Ladies and Gentlemen,
I am delighted to be back once again in your midst this year and wish to thank you for inviting me this evening to share my views about Pakistan’s economic prospects with this distinguished gathering.
I would like to address the following three questions that are of great interest to every Pakistani, whether living in Pakistan or abroad. (a) What has been accomplished so far? How sustainable these reforms and policies are? (b)
What is the future outlook and prospects for Pakistani economy? and (c) What are the challenges and risks facing the economy?
Accomplishments Made So Far:
There is a general agreement both within and outside Pakistan that there has been a remarkable turnaround in the economy during the last five years.
What are the main accomplishments that have laid the foundations for sustainable growth and poverty reduction in the future? I would list at least eight such factors that have made a significant positive difference in the economic landscape of our country.
1.
Fiscal Discipline: The major cause of Pakistan’s economic ills lay in the imprudence of fiscal policy where the governments indulged in excessive spending in relation to their revenues and incurred deficits in the range of 6 to 7 percent of GDP. These persistent imbalances led
Address delivered at the Seminar organized by the Pakistan Bankers Association U.K. at London on
January 17, 2005
1
to accumulation of public debt that reached unsustainable level of 100 percent of GDP by 1999-2000. The Musharraf Government has taken tough measures to introduce fiscal discipline in the country and has been successful in bringing fiscal deficit down to 2.4 percent last year.
How has this been achieved? There are three ingredients responsible for this outcome. First, revenue mobilization has doubled from almost
$300
ECONOMY
Ishrat Husain
H.E. Dr. Maleeha Lodhi, Mr. Anjum Iqbal, Distinguished Ladies and Gentlemen,
I am delighted to be back once again in your midst this year and wish to thank you for inviting me this evening to share my views about Pakistan’s economic prospects with this distinguished gathering.
I would like to address the following three questions that are of great interest to every Pakistani, whether living in Pakistan or abroad. (a) What has been accomplished so far? How sustainable these reforms and policies are? (b)
What is the future outlook and prospects for Pakistani economy? and (c) What are the challenges and risks facing the economy?
Accomplishments Made So Far:
There is a general agreement both within and outside Pakistan that there has been a remarkable turnaround in the economy during the last five years.
What are the main accomplishments that have laid the foundations for sustainable growth and poverty reduction in the future? I would list at least eight such factors that have made a significant positive difference in the economic landscape of our country.
1.
Fiscal Discipline: The major cause of Pakistan’s economic ills lay in the imprudence of fiscal policy where the governments indulged in excessive spending in relation to their revenues and incurred deficits in the range of 6 to 7 percent of GDP. These persistent imbalances led
Address delivered at the Seminar organized by the Pakistan Bankers Association U.K. at London on
January 17, 2005
1
to accumulation of public debt that reached unsustainable level of 100 percent of GDP by 1999-2000. The Musharraf Government has taken tough measures to introduce fiscal discipline in the country and has been successful in bringing fiscal deficit down to 2.4 percent last year.
How has this been achieved? There are three ingredients responsible for this outcome. First, revenue mobilization has doubled from almost
$300