Finance Minister Asad Umar on Saturday claimed that Pakistan’s economy is already on the road to recovery and that the next IMF programme that the government is pursuing will be its last.
Umar made those remarks during a question and answer session following his meeting with a delegation of stockbrokers at the Pakistan Stock Exchange in Karachi.
the finance minister had a similar sitting with the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), whose queries regarding the economy and economic measures he answered.
Umar said that a quick fix to jump-start the economy is to enhance the credit creation capacity of the banking sector — something he said will cover the financing needs of both the government and the public.
“Right now our cash-to-deposit ratio is 37 per cent,” he said. “We are targeting for this ratio to be brought down to 25 per cent. If we manage to do this, Rs2 trillion’s worth of credit creation capacity will be enhanced. This is where the financing for the housing scheme will come.”
Following a tumultuous couple of weeks for the bourse, the finance minister had met the traders today to allay their concerns about the market and the economy.
“There is tremendous growth in the stock market,” Umar told the market representatives, but agreed that “measures need to be taken in order to improve the market’s [recent performance]”.
“We will work for the betterment of the capital market and improve the overall atmosphere for investment,” the minister promised, but stressed that the stock market’s fortunes are directly linked with the economy’s health.
“If the economy will grow, the market will grow.”
The finance minister defended his policies aimed at curbing imports, saying: “The country was heading rapidly towards bankruptcy. I have to save 210 million Pakistanis.”
Umar explained that had he not taken swift measures to curb imports, the rupee “would have been devalued by 100 or even 200 per cent instead of just 27 per cent”.