Pakistan's finance minister optimistic on growth despite 'costly' war on terrorism

Pakistan has been beleaguered by terrorism and security "challenges" but is still managing to focus on growth and job-creation, the country's minister for finance, revenue, economic affairs, statistics and privatisation says.

"Pakistan's economy has shown great resilience against the global trend of developing countries and the emerging markets which have seen negative declines," according to Mohammad Ishaq Dar.

"We have shown seven-year high growth in the last fiscal year and in the current year we hope to cross 5 per cent. We are aiming at a growth rate of 7 per cent in the next two fiscal years so things are moving quite nicely," he said, speaking on the sidelines of the annual meeting of the Asia Development Bank in Frankfurt.

"But we had two serious challenges apart from macro-economic stability which is now in order, one was security and extremism and in June 2014, Pakistan took a bold decision to have an all-out war against terrorism and it's a fairly costly item," he said.

Pakistan has been a hot-bed of terrorist activity despite attempts to combat insurgents in predominantly the north-western region of the country that are linked to the Taliban, Al-Qaeda and so-called Islamic State. Despite the government being an ally of western countries' alliance against terrorism, the conservative Muslim country has also been accused of having an ambivalent stance towards religious extremism and, at worst, of sponsoring and harbouring terrorists.

Pakistan's government strongly rebuffs such accusations, pointing to the arrests of high-ranking terrorist suspects since 9/11 attacks and claiming that it assisted the U.S. in its pursuit of Osama bin Laden, the founder and head of Al Qaeda, who was killed in Pakistan in 2011.