March 27 Pakistan plans to lower taxes on manufacturers and support farm prices in its upcoming budget 2009, aiming to expand the economy at an average annual rate of more than 6 percent over the next five years.
?This should give a boost to economic growth,? Shaukat Tarin, finance adviser to Pakistan?s prime minister, said in an interview yesterday. ?We would like growth to pick up gradually, on a strong footing and on a sustainable basis.?
Pakistan?s economy is deteriorating amid the highest interest rates in Asia, year-long political wrangling and the nation?s fight against Taliban militants. The government, which was forced to turn to the International Monetary Fund for a $7.6 billion bailout in November, is due to unveil its budget for the year starting July 1 in June.
?Creating demand through consumer lending is not our strategy,? Tarin, 55, said in the interview in the capital Islamabad. ?In the past seven years, the performance of agriculture and manufacturing has not been commendable.?
The government estimates farmers will harvest as much as 25 million tons of wheat in April, 2 million tons more than domestic consumption, he said. Pakistan has imported more than 2 million tons of the grain in the past year.
Record inflation prompted Pakistan?s central bank to increase its benchmark lending rate four times in 2008 to a decade high of 15 percent. Tarin predicts economic growth will slow to an eight-year low of 2.5 percent in the 12 months to June 30, from an average 6.8 percent in the past five years.
