Pakistan govt to reduce budget deficit to 4% of GDP

Finance Minister Ishaq Dar has promised that the country's foreign exchange reserves would touch $15 billion by the end of this month

Pakistan is exercising strict financial discipline to reduce budget deficit to 4% of its GDP, Finance Minister Ishaq Dar has said while promising that the country's foreign exchange reserves would touch $15 billion by the end of this month.

Addressing representatives of the All Pakistan Newspapers Society (APNS) here yesterday, Dar said that Pakistan was marching on the road to progress and all macroeconomic indicators, such as the one pertaining to the stock market, the value of the rupee and revenue generation had improved considerably.

Dar said that the country's fiscal deficit has already been reduced from 8.8 to 5.2% by increasing the revenue by 16%, cutting expenses of the Prime Minister's House by Rs 40 million and abolishing unaudited secret funds of 34 departments, except those of the Inter-Services Intelligence and the Intelligence Bureau, State-run Associated Press of Pakistan (APP) reported.

The Finance Minister said that the foreign exchange reserves had increased to $14 billion and can touch $15 billion by the end of this month.

"We will try to take foreign exchange reserves to $15 billion by December 31 so that the country becomes eligible for easy loans from international financial institutions," Dar said.

He said that Pakistan has floated Sukuk bonds after 7 years and received a great response. "The government has issued the Sukuk bonds on the demand of Islamic Banks and got $2.3 billion offers in this regard," the minister added.

He further said that the Japanese agency JITRO had announced that Pakistan would be the second best choice for foreign investment, while international financial institutions had said the country could become the 18th biggest economy of the world.

"Moody's has changed Pakistan's rating from negative to stable, and maintained that if Pakistan remains stable politically and faces less external vulnerability then its rating may further improve," he said.

He also said that the government was committed to ending corruption and ensuring transparency.