By Sardar Burhan
ISLAMABAD, April 29 (KUNA) -- The current years are a period of optimism for Pakistan's economy, which is home to tremendous opportunities due to its favorable foreign investment with growing market demand for industrial production and the status of reasonable economic conditions.
With the advent of the China Pakistan Economic Corridor (CPEC) project, Gawadar Port, Generalised System of Preferences (GSP) Plus status and the GCC opportunities, Pakistan's current volume of trade is prospectively targeting up to USD 350 billion by year 2020.
The economic strength of a nation is the sole factor significantly recognized as main source of international stature. Likewise, the economic progress is the main source of any nations' endurance in the era of globalization that guarantees nations survival and prestige while interacting with other nations of the world. Right from its inception, Pakistan has always been struggling with its economic conditions and quite often, the country reached significant levels of economic growth through its agro-economy and the productivity through industrial development.
Pakistan's economy has remarkably continued to augment in the last two-year i.e. 2014-15, since the progressive economic reforms of the current regime and security measures have been great sources for the economic development.
Despite the factors of global economic fluctuations, Pakistan's national economic growth continued the progression with a moderate pace; and the foresight of strategic policies of the government having particular regard for bringing up the structural and macroeconomic reforms at the national level significantly proved fruitful. In addition, during the aforementioned fiscal period, the inflation rate previously 4.02 percent witnessed a significant decline at the lowest levels of 3.49 percent, whereas, the prevalent deficit also shrunk through the tapering opportunity of globally-low oil prices that consequently also contributed in the further affordability for the other commodities essential for common masses in the day-to-day life.
During the past two years, Pakistan's GDP growth rate increased from the past years and it slightly remained low at the 4.2 percent than the set target of five percent, but shows two successive years of increased growth than the previous years of stagnancy. The comparative analysis proves that Pakistan remained at the second place in South Asia in terms of GDP growth. The grant of GSP Plus status to Pakistan in 2013 by the European Union has so far played a significant role in boosting the country's stagnant economy.
The revival of the war-torn further affected at the hands of natural calamities, Pakistan has benefited out of the duty-free setup. This allowed Pakistan with 20 percent goods export opportunity without any tariff, whereas the rest is also passing through favored rate policies. Such concessions comprise a list of more than 600 items ranging from textile to agriculture and industrial production means.
The spokesperson for Finance Ministry of Pakistan, Dr. Shujat Ali told KUNA, "Pakistan's economy witnessed higher and broad based economic growth during the last two year of the present government (2013-14 and 2014-15). The growth above four percent in consecutive two year is remarkable at time when most emerging economies are facing much slower economic growth." He further said that economic indicators are moving in positive direction with the world rating agencies, like S and P, Moody's and Fitch have upgraded Pakistan rating. GSP Plus status is helping Pakistan's exports.
Pakistan's exports to EU have increased from USD 6.21 billion during 2013 to USD 7.54 billion in 2014; an increase of USD 1.32 billion in one year. External sector has become much more stable on the back of a robust growth in worker remittances and strong reserve position and stable exchange rate. The policy rate is at 42 year low level and helping in credit expansion to private sector which bode well for continued economic activity and brighter future outlook, said the spokesperson.
Similarly, the previously less than USD-five-billion foreign reserve in 2013 significantly climbed to USD 15-billion and USD 16-billion mark in 2014 and 2015 respectively. This indicated a stable advancement in terms of economic position. However, the constant energy crisis and the natural calamities remained main reasons to lack behind the set targets. These factors of production shortages obstructed between the industrial production and the external demands where the persisting efforts are still essentially required to sustain the conditions and overcome the hindrances that cause setbacks in the foreign investment opportunities.
The investment from the Gulf countries has always been a great source of inspiration that has continuously supported economic growth of Pakistan, setting the pace for an upward trend through foreign investment. For the economic aspects, both Pakistan and the Gulf States benefit from each other's formalized bilateral and multilateral relations in terms of trade, security and economic development. In addition, both benefit through remittances coming from mutual trade, oversees Diasporas, and the investments in the development projects in Pakistan.
Still, there are many opportunities to be explored, such as joint ventures in Halal items and the agriculture productions that would also support the promotion of Pakistani food items in the GCC countries and to export them to the international market. In fiscal year 2012-13, Pakistan's remittances from the Gulf region remained at USD 10 billion, which constitute about 61 percent of its total remittances; whereas in the following years, the trade volume has drastically rose to USD 59 billion and USD 72 billion. Pakistan is keen to develop special economic zones under the GCC Free Trade Agreement (FTA) setup for further cooperation of mutual economic goals. (end) sbk.hb