Lahore: Holding the State Bank of Pakistan (SBP) partly responsible for the gloomy economic situation, the Pakistan Economy Watch (PEW) on Sunday said the has failed to show correct picture of economy in its recently released annual report.
Political interference and attitude of the central bankers to please government while misleading masses has left the Apex bank untrustworthy and ineffective, said Dr. Murtaza Mughal, President PEW.He said that the SBP is no more regarded as a good regulator; rather it has become an efficient machine to print as much currency as required by the politicians to finance their luxuries.
Report based on assumptions, optimism and assurances will not help government, masses and nervous investors in any way but it will further dent the reputation of the bank and country, he added.
Dr. Murtaza Mughal said that the SBP should have admitted its failures and reported that the year 2012 added to the miseries of masses while there is no hope of betterment in the current year as government and opposition have no will to implement reforms.
SBP seems overconfident about certain things including payment of Coalition Support Fund, receiving outstanding money from Etisalat, raising revenue from sale of 3G licences and hike in remittances which can be best described as assumptions.
It remained overoptimistic on many other fronts despite rapidly deteriorating economic indicators and sluggish investment while the government has so far avoided serious effort to negotiate a loan with the IMF which amounts to keeping masses in the dark.
Failure of the SBP to resist or at least express displeasure over violation of borrowing limits by the government has remained a big obstacle in revenue mobilisation and curtailing unnecessary expanses.
Expressing concern over unsustainable fiscal deficit, Dr. Mughal said that all the efforts to revive economy will meet failure as far as government’s total expenditures exceed the revenue that it generates which leaves it only with borrowing option.