Govt to discuss mark-up rate cut with IMF if inflation declines

KARACHI - Shaukat Tarin, Advisor to Prime Minister on Finance, Revenue, Economic Affairs and Statistics, has said that the government would soon hold talks with the International Monetary Fund (IMF) for reduction in the interest rates in Pakistan in case the inflation declines in the country.
Presiding over the ground breaking ceremony of P&G's second manufacturing facility in Pakistan at Port Qasim Authority on Thursday, Shaukat Tarin said that inflation was expected to decline in the third quarter of the current financial year.
Talking to media, he said that monthly statistics on inflation and prices have depicted that the rate of inflation started to slowdown during last month.
He also said that the stock market stabilization fund worth 20 billion rupees would be provided within a week.
Tarin said that the country would see a significant relief in the trade deficit in this fiscal that was being anticipated around 12-14 billion dollars in FY09 as against about 20 billion dollars in FY08.
He said that the P&G would bring in Foreign Direct Investment of $ 100 million in the country as the government is still fully committed to offer all facilities to the local and foreign investors for the enhancement of industries.
"Government is making its all-out efforts to boost real and manufacturing sector by providing maximum relief and incentives, as these sectors are major contributor in the GDP growth", he said.
He said that the government is also considering bringing down the utility tariff amid enable the growth in the industry.
He also stated that due to slowdown in international oil and commodity prices witnessed during last month, the trade and current account deficits have narrowed to a certain level which is expected to slump further by the upcoming month of FY009.
Speaking at the occasion, Laurent Philippe, Group President for P&G's Central Eastern Europe, Middle East and Africa region said; "This is our second plant in Pakistan and it is P&G's largest investment in the country. This investment symbolizes 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 industrialization 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".
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 minimizing the impact on the environment but also using less energy. In addition to bringing in the latest P&G technology, the plant will realize extensive local skill development with P&G experts from all over the world coming into Pakistan to train Pakistanis.