Washington – Pakistan’s Finance Minister invited American businessmen and investors to take advantage of the lowest discount rate in 10 years to expand investment in South Asia’s second biggest economy.
The prevailing key discount rate of 8 percent provided “golden opportunity to investors to undertake capital expenditure and expand production capacity,” Finance Minister Ishaq Dar told a business meeting in Washington on April 16, says an official announcement.
Dar hinted at further cut in discount rate by Pakistan’s central bank in an April 15 interview with Bloomberg in London. The next rate meeting is due in the third week of May.
“To attract investment was one of the top priorities of the government,” the minister told a business meeting in Washington, organized by U.S.-Pakistan Business Council. He assured the government of Prime Minister Nawaz Sharif was making all efforts to address investors’ genuine concerns.
Giving an overview of the economy, Dar said the economy was projected to grow by 5.1 percent in the financial year ending June 30, compared with 4.1 percent last year and an average 3 percent in the preceding five years.
The government’s growth projection is much higher than 4 percent, estimated for the current financial year by the International Monetary Fund which has praised Pakistan for achieving economic stability but stressed steady implementation of reforms was vital to stay the course.
Dar projected Pakistan’s inflation to decline to a 10-year low of 5 percent, and reduction in fiscal and current account deficit as the country implemented its plans to privatize state-owned assets and shareholding in other assets.
Pakistan last week sold its remaining 609 million shares in HBL, the country’s biggest lender by asset, and Dar told Bloomberg about the expected sale of Pakistan Steel Mills Corp and the core unit of the national flag-carrier, Pakistan International Airlines by the end of 2015.
Talking to representatives of various financial groups in London, en route to Washington, Dar also hinted at returning to the international debt market in the next fiscal year, after Pakistan raised $2 billion last year through the sale of euro bonds.
Dar is in Washington to attend spring meetings with IMF and the World Bank. IMF is also due to hold 7th review of Pakistan’s $6.6. billion loan secured in 2013 to avert a balance of payment crisis. Pakistan has successfully complete record six reviews with IMF for the current program.
(The title picture shows Pakistan’s Finance Minister Ishaq Dar with Chairman Exim Bank Mr. Fre Hochberg in Washington on April 16.)