REVITALIZING PAKISTANS ECONOMY

REVITALIZING

PAKISTANS ECONOMY

The US-Pakistan Diamer Basha Dam Project

Business Opportunities Meeting
Remarks by Pakistan Minister of Finance
Mohammad Ishaq Dar
October 8, 2014
Washington, DC

REVITALIZING PAKISTANS ECONOMY

ECONOMIC DEVELOPMENT

Good News in Pakistan!

Economic Growth: 4.14% in FY 2013-14 as
compared to 3.7% in FY 2012-13. This is the highest
growth in the last six years;

Per Capita Income: increased to $1386 in FY

2013-14, up 3.5% from previous year;

Industrial Sector: grew 5.8% in FY 2013-14,

aided by increased availability of electricity and
better management of available gas supplies, and
the highest in the last six years;

Inflation: dropped from 12% average over past

years to 8.6% during FY 2013-14.

REVITALIZING PAKISTANS ECONOMY

ECONOMIC DEVELOPMENT

FBR Revenues: up by 16.4%, rising from

Rs.1946 billion to Rs.2266 billion during FY 201314;

Fiscal Deficit: down from 8.2% of GDP in FY

2012-13 to 5.7% in FY 2013-14, the single largest
fiscal adjustment in one year;

Development Spending: recorded at Rs.441

billion in FY 2013-14, a 23% increase over FY 201213 and exceeding revised target of Rs.425 billion.

Credit to Private Sector: increased from

Rs.19 billion in FY 2012-13 Rs.379 billion for FY
2013-14, a growth of 19 times;

Government Borrowings from State Bank

of Pakistan: reduced to Rs.303 billion, merely 21%

REVITALIZING PAKISTANS ECONOMY

ECONOMIC DEVELOPMENT

Exports: were recorded at $25.13 billion during FY

2013-14 an increase of 2.73%;
Imports: were recorded at $45.11billion during
FY 2013-14, showing a negligible increase of
0.35%;
Remittances: rose to $15.83 billion during FY 201314, showing an increase of 13.7%;
Exchange Rate: during this calendar year alone, the
rupee has appreciated by 7%, after having pushed up
to Rs.110 a US Dollar in November 2013. This is the
single most important indicator of economic stability ;

REVITALIZING PAKISTANS ECONOMY

ECONOMIC DEVELOPMENT
Official Foreign Exchange Reserves: foreign
exchange reserves of the country have entered safe
territory and no longer pose any risk to the economy. As
on 25th September, 2014, the reserves stood at $13.3
billion comprising $8.6 billion of the State Bank and $4.6
billion of scheduled banks;
Karachi Stock Exchange Index: has continuously
scaled new heights and stood at 30,224 on 15 th July,
2014, showing an increase of 52%. Market capitalization
increased from Rs.5.04 trillion to Rs.7.14 trillion and for
the same period, showing an increase of 42%, while in
dollar terms it amounted to a 41% increase.

REVITALIZING PAKISTANS ECONOMY

ECONOMIC DEVELOPMENT

Incorporation of New Companies,

has increased to 4587 during FY 201314, showing an increase of 16%.
Pakistan is successfully promoting
business!

REVITALIZING PAKISTANS ECONOMY

OTHER RESULTS
Raising of $2 billion through Euro Bonds (first time in 7
years);
Successful auction of 3G-4G licenses, raising nearly
$1.2 billion with additional licenses still available for sale;
Resumption of program lending by The World Bank and
ADB, through which we accessed $ 1.5 billion during the
year;
Successful revival and resumption of the privatization
program, divesting the shares of United Bank Limited
(about $400 million) and PPL (subscription Rs.30 billion
which is highest ever in our stock market history at
Rs.15.3 billion.

REVITALIZING PAKISTANS ECONOMY

MAJOR INITIATIVES: EXPORTS

GOP has incentivized the export

industry by:
Offering drawback to exporters on
enhanced exports.
Reducing the mark-up rate for Export
Refinance from 9.4% to 7.5%.
Reducing Rates for Long-term Financing
Facility (3 to 10 years) to textile sector for
upgrading technology from 11 % to 9%.

REVITALIZING PAKISTANS ECONOMY

OTHER INITIATIVES

We have listed public securities for

trading in the stock exchange;
Pro-poor expenditures, through the
National Income Support Program,
have witnessed a phenomenal
increase from Rs.40 billion in FY 201213 to Rs.118 billion in FY 2013-14 (a
nearly 3 fold increase).

REVITALIZING PAKISTANS ECONOMY

OUR GOVERNMENTS VISION FOR 2018

GDP to grow gradually to around 7%;

Inflation to remain in single digits i.e. no more
than 8%;

Fiscal Deficit to be brought down to 4%;

Foreign Exchange Reserves to be built up
to $20+ billion;

Investment-GDP Ratio to be increased to

20%;

Industrial sector to grow by 8%;

Public Debt to be brought down to less than
55% of GDP;

Tax-GDP Ratio to be increased to 15%;

REVITALIZING PAKISTANS ECONOMY

OUR GOVERNMENTS VISION FOR 2018

Current Account Deficit to be brought down

to -2% of GDP;
Foreign Direct Investment to be increased
to $5.5 billion;
Expending around 4% of GDP on education
and health;
Poverty Alleviation and Support to
vulnerable sections of the society;
Providing Energy to secure Pakistans full
potential for growth.

REVITALIZING PAKISTANS ECONOMY

PROMOTING ENERGY FOR PAKISTAN

First Goal: Sufficient and Affordable

Energy
New power projects adding megawatts in
Pakistan:

Two Coal Power Plants of 660 MW each at Port Qasim;

Two Coal Power Plants of 330 MW each in the Thar Desert;
Two Coal Power Plants of 660 MW each in Punjab;
Two Wind Power Projects of 250 MW in Sindh;
Ten Wind Power Projects of 660 MW each in Balochistan;
Chashma Civil Nuclear Power Project of 600 MW;
Keyal Khawar Hydro Power Project of 122 MW;
Allai Khawar Hydro Power Project of 122 MW;
Two Karachi Nuclear Coastal Power Projects of 2117 MW;
Chichoki Malian of 525 MW.

REVITALIZING PAKISTANS ECONOMY

PROMOTING ENERGY FOR PAKISTAN

Increasing Reliability of Power

Brown-outs being reduced through various efforts:
Refurbishing and rehabilitating existing power plants to increase output;
Promoting major new power projects, such as the Dasu Hydropower
Project and Diamer Basha Dam Project to significantly add capacity;
Investing in new transmission and distribution networks;
Promoting operating efficiencies and investing in maintenance;
Promoting energy efficiency and renewable energy initiatives.

Increasing Natural Gas Supply: enhanced supplies

through increased exploration/production, imports both
overland and sea.
E.g., Construction of terminal at Port Qasim to import LNG, which will
likely receive 200 MMCFD of LNG within one year.

REVITALIZING PAKISTANS ECONOMY

PROMOTING ENERGY FOR PAKISTAN

Ongoing major power plant investments:

Signed loan agreement with the World Bank for Dasu
Hydro Power Project Phase-I (2300 MW), Phase-II of
the project will be of 2200 MW;
Progressed in acquiring land for Diamer Basha Dam
& its associated 4500 MW hydropower project;
Fast-tracked the 969 MW Neelum-Jhelum hydropower
project;
Upgraded generation units of the Mangla Power
Station; and
Upgraded the 747 MW Guddu Power Project.

REVITALIZING PAKISTANS ECONOMY

PROMOTING ENERGY FOR PAKISTAN

Our Energy Policy is aimed at

improving the energy mix to avoid the
need for frequent tariff increases;
aligning tariffs with costs; and at
attracting private investments in
transmission and distribution to
improve efficiency of our system.

REVITALIZING PAKISTANS ECONOMY

OBJECTIVES: INFLATION, TAXATION AND SOCIAL PROTECTION

INFLATION goals:
To keep inflation in single digits i.e. below 8%, our
Government is making all out efforts to:
Curb non-developmental government spending;
Limit government borrowing;
Decrease tax rates;
Reduce power cuts and energy cost;
Lower interest rates through effective monetary
policy;
Remove supply side bottlenecks through increased
agricultural output and reduced wastages.

REVITALIZING PAKISTANS ECONOMY

OTHER INITIATIVES: TAXATION

TAXATION goals:
Gradually withdrawing tax exemptions over
the next 3 years, not only to add to our
revenues but also to make our tax system
transparent and corruption-free, and
ultimately bring market entry barriers down.

REVITALIZING PAKISTANS ECONOMY

INFRASTRUCTURE

INFRASTRUCTURE goals:
Regional connectivity initiated through incountry North-South corridor projects to be
completed in the next 4 years:
Karachi-Lahore Motorway,
Gwadar-Ratodero Motorway,
Faisalabad-Khanewal-Multan Motorway, and
Pak-China Economic Corridor from Gwadar to
Kashghar through motorway and railway. This
economic corridor will give the much-needed boost
to our reviving economy.

REVITALIZING PAKISTANS ECONOMY

SOCIAL PROTECTION

SOCIAL PROTECTION goals:

The National Income Support Program,
which comprises of Benazir Income
Support Program, and Prime Ministers
Youth Program, will enhance social
protection efforts. We are working to
combine the synergies of these
programs to make them more
effective.

REVITALIZING PAKISTANS ECONOMY

CONCLUSION

We are a resilient nation facing

political, social, economic, and
security challenges, yet we are
optimistic and confident of our
countrys future and remain
committed to our vision for the
country.

REVITALIZING PAKISTANS ECONOMY

Thank you!