Finance Minister Shaukat Tarin announced on Wednesday to take restrictive measures to “cool down” an “over heating” economy, marking the beginning of reversal of expansionary fiscal policies after external sector vulnerabilities exposed sooner than expected.
“It has been decided to introduce a 100% cash margin requirement for imports and impose regulatory duties to curb imports of non-essential items,” Tarin told a press conference – his second in less than 10 days to respond to increasing criticism over higher inflation.
“If [the new] measures are not taken, the economy could grow at more than 5% rate and this is the time to control the growth rate, the finance minister told the reporters, while explaining the reasons behind taking these measures.
“My concern is that the economy may overheat and there could be exchange rate related problems if the GDP growth rate exceeds above 5% annually,” he added, while responding to a question from The Express Tribune.
