Thaindian News

Islamabad, Oct 10 (IANS) Pakistan’s central bank should find some way to control government spending as there is “no real way of ensuring an economic recovery” without that, said a Pakistani daily Monday.

The Nation said in an editorial that the State Bank of Pakistan (SBP) has approved a cut of 1.5 percent, to 12 percent, of its benchmark policy rate, the second successive cut since the July cut of 0.5 percent.

The cut is a straightforward attempt to stimulate the economy, and the reaction from the business community has been favourable, it said.

The editorial said that a key factor is government spending.

The central bank “should have found some way to control government spending”.

“Without that component, there is no real way of ensuring an economic recovery. So long as the government sees taxpayer’s money as a means of maintaining a lavish lifestyle for the people in it, it will not do what a government must in difficult economic times, which is control its expenditures, balance its budget and not place undue pressure on the money supply,” the editorial said.

It added that the bank “should be forthcoming about the government’s impact, and not act as a means of concealing it”.

“However, it should continue to cut interest rates, because it should make sure that it is part of the solution, not the problem, that of providing the economy a stimulus as well as capping government expenditures.”