Cut in discount rate: IMF permission will be sought, says Tarin

[Naveed Yaseen]

KARACHI (December 19 2008): The government has decided to negotiate with International Monetary Fund (IMF) for a cut in discount rate if the inflation goes down, which is expected to take place in the third quarter of current fiscal year.

Talking to newsmen after the groundbreaking ceremony of Procter & Gamble Pakistan manufacturing plant at Port Qasim on Thursday, Shaukat Tarin, Advisor to the Prime Minister on Finance said that monthly comparison of inflation figures showed that it has declined last month. He said that the government is fully committed to provide all facilities to the local as well as foreign investors for the promotion of industries.

"Government has also decided to promote agricultural and manufacturing sector by providing maximum relief and incentives, as these sectors are major contributors in the GDP growth," he added. He said that with an objective to promote the industry, the government is also going to rationalise the utility tariff to enable the industry to grow.

Advisor said that the country's economy has faced several difficulties during the last one year due to the unexpected price increase of commodities prices like oil in the world market. However with the reduction in the commodity prices some positive impact has been seen on the economy and twin deficits are shrinking.

"Some two billion dollars decline has been registered in the trade deficit and we are expecting a trade deficit of some 12-14 billion dollar by the end of June 2009 from 20 billion dollar in fiscal year 2008," he added. He said that the government is restructuring the planning commission and a nine point economic agenda is being planned in consultation with all the stakeholders.

"We have had a good growth rate during the last 10 years and we want it to continue through promoting agricultural and manufacturing sectors," Tarin said. He said that some new industrial zones are being set up in different parts of the country aimed to boost the industries.

On the occasion addressing the gathering US Ambassador Anne W. Patterson said that establishment of the new P&G plant would promote trade relations between Pakistan and US. She said that some 100 million dollars direct investment would be introduced through P&G new plant and some 7000 new jobs would be generated.

Speaking at the occasion, Laurent Philippe said; "This is our second plant in Pakistan and it is P&G's largest investment in the country. This investment symbolises P&G's confidence that Pakistan will continue to provide a stable and conducive business environment over the long-term; strengthening our commitment to invest more in the country and serve the consumers of Pakistan.

With the plant occupying only one-third of the total 25 acres of land acquired, we have built in provision for future expansion projects and other plants to serve the domestic market with the full portfolio of P&G products." Elaborating on the vision behind this investment, Qaisar Shareef, Country Manager P&G Pakistan said "the launch of our second manufacturing facility in Pakistan is testimony to P&G's successful history in the country.

This investment project will improve local industrialisation prospects by creating tremendous potential opportunity of business over the next few years. "Once established, the plant will create employment opportunities for more than 7000 Pakistanis directly and indirectly. Additionally, it will contribute $1.1 billion to the national exchequer over 10 years", he added.

He said that this mega project consists of the construction of a complete industrial production unit for the manufacture and packing of laundry detergent and diapers. The plant will be based on latest European technology, ensuring compliance not only to Pakistani requirements but also with the strictest American, British & German standards by not only minimising the impact on the environment but also using less energy, he concluded.

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