Existing status of economy and covid steps encouraging.

Interview with Mr Nasim Beg - CEO, Arif Habib Consultancy

PAGE: Tell me something about yourself and your career please:

Nasim Beg: I have around fifty years of experience of working across financial services, as well as the real economy. Over this time, I have also worked in the UAE and the UK. I started out my career path by qualifying as a Chartered Accountant in 1970.

PAGE: What is the current state of the economy of Pakistan?

Nasim Beg: In the recent months we have observed significant growth in Large Scale Manufacturing (LSM). In addition, we are looking increasingly good on the Current Account, especially on the back of home remittances, which have shown a remarkable growth resulting in improved foreign exchange reserves, which in turn has resulted in considerable strengthening of the Pakistan Rupee. The Stock Exchange, except for minor corrections, has been performing well.

In handling the lockdowns owing to Covid-19, some of the pro-poor measures taken by the government were good and timely. In addition, the measures taken by the State Bank were extremely helpful for business and industry. The Covid management of the first wave has been highly successful and recognized internationally; however, a word of caution and worry, as the second wave is now gaining strength and there are serious signs of isolation fatigue amongst people, as well as a degree of reduced recognition of fear this time around, which is leading to poor adoption of preventive SOPs by the public.

Also, while the LSM growth is very impressive, we must recognize the low base affect while looking at that the growth number.

Nevertheless, overall, the above indicators appear encouraging, though on the agricultural side, we have had the bad news of a significant shortfall in cotton production, which will result in having import increase. In addition, the supply side of wheat and sugar were not managed well, which led to inflationary pressures in food prices. This is obviously hurting the middle- and lower-income segment, which is the large bulk of our population.

Thus, in balance, it is too early to express, with confidence of conviction, on how the economy is doing currently, especially when the government has recently stated that its interaction with International Monetary Fund (IMF) is being revived, which clearly indicates that we need continuing help.

PAGE: Your views on current account and imports vis a vis the economic growth :

Nasim Beg: This aspect of the...