Sharif calls for export-led growth as Naya Nazimabad REIT lists on PSX

Prime Minister Shehbaz Sharif struck the gong at the Pakistan Stock Exchange on Thursday to mark the listing of the Naya Nazimabad Apartments REIT, using the ceremony to argue that the country's economy must be led by exports and driven by the private sector.

Mr Sharif said the incentives given to the construction industry in the budget were producing results, with growth particularly visible in Karachi's construction sector. He said various industrial sectors had received subsidies since the 1960s but had failed to make a significant contribution to exports; instead, commodity prices rose while quality and productivity suffered and import substitution was not achieved. "This is a bitter reality that must be corrected before we can move forward," he said, urging exporters to play an effective role in promoting export-led, sustainable growth.

The prime minister said that during his recent visits to the US and the UK he held special meetings with prominent bankers who appreciated the government's reform efforts, and that the IMF chief had remarked that it was a new Pakistan, to which he replied that it was not a new Pakistan but a new team. He said the budget provided Rs2.3 trillion in tax breaks, that the issuance of Eurobonds had been a major success, that State Bank of Pakistan foreign exchange reserves had reached $21.4 billion and that remittances were showing significant growth. The PSX had made substantial progress, he said, but further reforms were needed with regional markets in view.

Federal Minister for Finance Muhammad Aurangzeb told the same ceremony that economic growth would reach 4% in 2027, compared with 3.7% last year, and that the export-led model was expected to deliver 4% growth in the current year. He said the government could quickly lift growth to 6% through a consumption-led model, but that such a short-term increase would create balance-of-payments pressures and push the economy back into a boom-and-bust cycle. He said the number of tax filers had risen 45% to more than 5.7 million this year, from 3.9 million last year, and that the government was working on reforms and tax-related issues to increase activity in the capital market.

On housing finance, Mr Aurangzeb said Rs60 billion had been disbursed under the Prime Minister's Apna Ghar Programme, while the banking industry had approved Rs340 billion under the initiative. "The real issue is no longer the issuance of loans," he said. "The banking industry has taken the first step; now the supply side has to take the next step."