ECC concerned over widening of current account deficit

Approves one month salary for PSM staff

Muhammad Arshad

Islamabad

The Economic Coordination Committee (ECC) of the Cabinet, Thursday, showed concern over the widening of current account deficit stressing need to increase exports of goods and services to bridge the gap. The committee observed decline in wood products, leather products, engineering products, chemicals as well as coke and petroleum products.
ECC also approved, in consideration of the proposal submitted by the Privatization Division, one month’s (Nov. 2016) salary to the tune of Rs.380 million for the employees of Pakistan Steel Mills, Karachi.
ECC met here with Finance Minister Ishaq Dar in the chair and reviewed the key economic indicators. The committee reviewed the stock position and found that stock of wheat as on February 28, 2017 is 5.52 million tons showing sufficient quantity of local wheat for releases to mills by provincial food departments and PASSCO. The total reported stock of sugar in the country as on February 22, 2017 stood at 3.20 million tons. The stock of various POL products averaged 30 days on March 01, 2017.
The Finance Secretary gave a detailed presentation to the meeting. It was informed that headline inflation measured by Consumer Price Index (CPI), Wholesale Price Index (WPI) and Sensitive Price Index (SPI) for the month of February 2017 increased to 4.2 percent, 5.3 percent and 1.1 percent, respectively on account of increase in food inflation by 3.7 %, non food 4.6%, and core 5.3%.
The committee was also informed that Large Scale Manufacturing is continuously moving upward as in November and December the growth remained 7% over last year. The sectors which showing positive growth are iron and steel products which increased by 15.63 %, electronics 14.35%, non metallic mineral products 9.31%, pharmaceuticals 7.90%, food beverages & tobacco 6.95%, automobiles 6.67%, paper & board 5.69%, fertilizers 3.47%, rubber products 0.45% and textile 0.14%.
The committee was informed that outlook of industrial sector is positive and encouraging as the credit to private sector seen expansion more than 22 %. The industrial sector is improving due to persistent growth in electricity generation and gas production as electricity generation in January 2014-15 was 8,292 MW which increased to 9210 MW in January 2015-16 and 9352 MW in January 2016-17. Likewise the gas production also increased above 4000 MMCFD in December 2016 compared to 2015 and 2014 which was 3627 and 3780, respectively.
The committee noted that negative growth in exports sector is bottom out in January 2017 as it registered a growth of 4.6 % over last year. However, on average it declined by 1.13% whereas imports on average increased by 9.2% and on year on year increased by 28% in January 2017. On the positive note most of the imports is coming in machinery group showing productivity. The import of the machinery registered at 42% of which power generating machinery 38%, textile 117%, construction and mining 101% etc.
The remittances received during July-January 2016-17 amounted to US$ 10.946 billion against US$ 11.155 billion in 2015-16, registered decline of 1.9 percent. However, on year on year in January it improved by 1.5%. The FBR tax collections on year on year improved by 9% in January and on average during July-January 2016-17, the tax collection improved by 7.6%. The committee also noted that increasing trend in foreign direct investment that it improved by almost 10% during July-January of the current year over last year. The major recipient sectors were food, power, electricity, and construction.

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