‘Microfinance key to tackling poverty’

ISLAMABAD: Finance Adviser Dr Abdul Hafeez Shaikh on Wednesday said the government was committed to increasing production capacity of microfinance sector to grab maximum benefits out of minimum resources.

Addressing a two-day microfinance conference here, the adviser said that stable economy was pivotal for promotion of the sector, which has been made possible due to timely and effective measures by the government.

He said the unprivileged segment of society could be brought out of extreme poverty by promoting microfinance. Shaikh pointed out that due to huge fiscal deficits in the past, provision of loans to the private sector got affected.

However, fiscal deficit during the first five months of this fiscal year not only went down as, but also entered surplus zone if interest payments were not taken into account.

“For the first time, primary fiscal balance is in surplus now. Our revenues are more than expenditures, which is a positive sign for economy,” he added.

The adviser also said the government would bring down the cost of doing business especially in microfinance.

Talking about the government’s achievements in macroeconomic indicators, he said last month (November), almost 10 per cent increase was recorded in exports while imports declined considerably, which resulted in contraction of current account deficit by over 36pc. Meanwhile, revenues had also increased by 17pc in the first five months of current fiscal year.

“Due to positive macroeconomic indicators, more and more people (investors) from abroad are attracted to Pakistan, as evident from portfolio investment of around $1 billion during this fiscal year.”

If all institutions performed well then there would be no need to go back to the International Monetary Fund again, he added. The adviser said foreign direct investment witnessed a record increase of 236pc last month, whereas local investors were also showing more trust given the country’s stock market witnessed a significant positive change and crossed the 40,000 barrier.

“Bloomberg has reported that in dollar terms, Pakistan Stock Exchange has proved to be the best performer in the world during the previous three months,” Shaikh said, adding that non-tax revenues had also posted a record increase of over 100pc and hoped that the government would easily surpass the target of collecting Rs1,200 billion non-tax revenue by the end of 2019-20.

He continued that Moody’s on Monday upgraded Pakistan’s economic outlook from negative to stable which sent a positive message across the globe about the country.