State Bank Governor says only private sector can achieve greater growth

Governor State Bank of Pakistan (SBP) Ashraf Mahmood Wathra has said that only the private sector can achieve a higher growth rate in the medium term. He was speaking to a gathering of finance experts, bankers, journalists, lawyers, and academia organized by the Jang Media Group.

While addressing the topic “Role of the Private Sector in Economic Growth of Pakistan”, the Governor stated:

“The private sector is the only channel that can achieve a higher growth rate in the medium term, a growth truly compatible with the demographic changes the country is going through. In current times, the energy shortages are being worked on. LNG imports and CPEC-related power projects are being sufficiently planned for smooth execution and returns on investments are high.”

Right now the potentially investable resources with the corporate sector are Rs. 3.7 trillion, which is more than double the Public Sector Development Programme (PSDP) allocation for the year 2017. Capital banks and investment companies have also been bringing in funding for the corporate sector.

However, contrary to Governor Wathra’s statements, SBP recently released a report according to which banks have over 90 percent of the total investments in government papers. On this, he responded that if the banks see more demand in the private sector financing then they will definitely make the switch. They can, at any time, give up their government securities and move to private sector provided the private sector credit is in demand. He said that banks are urged to increase the private sector credit.

On the topic of investment, Governor SBP spoke of the need to invest in universities. There are students making solutions to real world problems but there are no investors. This is not the area State Bank usually delves into, so he requested investors and the government to take note. He stressed on the need to take such steps so that we can come at par with the international market. He also went on to say that the private sector is the driving force of Pakistan’s economic development.

“After all, the 1.7 million youth of our country can’t rely on just the government for jobs and it is the private sector that is playing its part in providing employment opportunities too.”

Source – The News