No need to panic, says Tarin as stocks crash

The Nation  |  Dec 04, 2021

ISLAMABAD   -  The federal government on Friday claimed that Pakistan’s economy is moving in the right direction and there is temporary increase in inflation rate and widening trade deficit, which is due to higher international prices. 

“The inflation and import bill are connected and have same cause and that is international commodity prices,” said Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin in a joint press conference along with Advisor to Prime Minister on Commerce and Investment, Abdul Razak Dawood.

He informed the media that the country was witnessing inflationary pressure due to rise in international prices of commodities which it was importing, citing that the prices of fuel, LNG, coal, steel and edible oil rose in international market and have impact on inflation in Pakistan.

Shaukat Tarin said that anxiety among the investors caused due to a historic high trade deficit.

Ali Zafar lauds brother Danyal Zafar for his first concert “An increase in revenue means that the country’s economy is growing,” Tarin said, highlighting that our exports and remittances have also increased significantly.

He said the government could announce mini budget in next seven to ten days. The mini budget would be first presented in Economic Coordination Committee (ECC) of the Cabinet and then in Federal Cabinet and parliament. He said that government would slash the development budget by Rs200 billion in mini budget. He hinted that government could review the property valuation where it needed.

He further said that Pakistan’s imports have enhanced to $7.75 billion in November 2021 as compared to $6.3 billion in October. Imports have increased by $1.4 billion in one month due to several factors. The factors included increase in imports of raw materials by $252 million, petroleum products by $508 million, vaccines import by $400 million and edible oil went up by $134 million in last one month. “These four factors have increased the import bill by $1.4 billion in last one month,” he added.

Actress Rubina Ashraf expresses disappointment over Pakistani drama industry Adviser hoped that things will improve in next few months, as oil prices in international market had reduced to $68 per barrel from $87 per barrel. Edible oil prices are expected to decline in next month (January). Vaccines procurement are funded by World Bank and Asian Development Bank. He said that all these aforementioned are temporary factors.

However, he said, only growth is permanent. “Pakistan’s economy is growing.” Tax collection has shown growth of 36 percent, which is showing economy is strengthen. Inflation and trade deficit are imported and same happened in India where trade deficit doubled to $20 billion this year. He clarified that quantity of imports are not showing massive increase but prices have enhanced.

“No need to panic,” Tarin reiterated and added that fundamental of economy are in right direction including growth in revenue collection, electricity consumption and better production in crops. He added that the government understands that the common man is under pressure and hence, it is working to provide relief to the masses. Shaukat Tarin said the government is fully cognizant of the problems being faced by the lower and lower middle income groups due to price hike. He said the government is taking measures to provide relief to lower class through Ehsaas Rashan Program and Kamyab Pakistan Program.  

Gold prices increase by Rs 350 per tola He hoped that exports and remittances will shrink Pakistan’s widening trade gap. Tarin said that the items whose prices increased were all imported goods. He added that inflation is rising globally.

He mentioned that domestic inflation is lower than last year. He assured that the next two to four months will be difficult, however, “things will get better.” He urged people to have patience as prices will eventually come down. Addressing the press conference, Dawood highlighted that imports clocked in at $7. 7.7 billion in November, which is up by $1.14 billion as compared to October.

Speaking on the occasion, Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood expressed satisfaction over the increase in imports of raw material, adding that imports of machinery and energy are increasing. He said that pressure on imports would reduce from next month. He was optimistic that there would be no major difference from the budget target in exports and imports figures. “Situation will get better from next month”. He informed that Pakistan’s exports had touched historic highest $2.9 billion benchmark in November. He was confident that exports would reach to $3 billion in December.

Lynching of Sri Lankan national 'day of shame for Pakistan': PM Imran Khan He said that government is working to enhance rice exports. Shaukat Tarin said that International Monetary Fund has asked Pakistan to remove tax distortions and provide targeted subsidies. He added that we could provide targeted subsidies when we would have revenues, which already went up by Rs300 billion then the target percent in five months. Explaining further, he said that Pakistan had agreed with the International Monetary Fund (IMF) for revenue generation measures in March 2021 for which we had already taken the loan tranche of $500 million.

He it is the working class that is suffering but profits of listed companies have increased by Rs900 billion. “We have been directing companies not to accumulate money and pay salaries to their employees,” he said. On a question about not passing impact of reduced oil prices to masses, Adviser on Finance and Revenue said that government has increased General Sales Tax to 1.6 percent. We did not increase the GST to standard 17 percent, which could increase petrol price to Rs175 per litre. He said that State Bank of Pakistan would decide to revised the inflation rate.

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