Islamabad-Pakistan’s Finance Minister, Muhammad Aurangzeb, has expressed optimism about the country’s economic recovery, citing timely government interventions ¹. According to Aurangzeb, the economy is now showing signs of improvement, thanks to sincere efforts by the government.
Addressing a press conference in the capital on Sunday, the finance minister said inflation had come at the single digit – seven percent – from 38 percent as the PM himself had been spearheading the efforts in this regard.
The finance minister said the international financial institutions had shown trust in the country’s ability to handle the economic crisis.
He mentioned that the IMF staff was also astonished at the success of the Pakistan’s economy – which became stable in just 14 months adding the board was well aware of the government’s ability to steer the country out of crisis.
The minister highlighted the cooperation by the chief ministers of four provinces adding that the government could achieve the best possible outcome by working as a whole.
Lastly, he also mentioned the climate change phenomenon which has been taking a heavy toll on the country.
“It is not only the charter of economy but also the charter of environment,” he said.
Since the visit was not anticipated, there were reports that the global lender’s visit would mean that the federal government would have to roll out a mini-budget.
In a statement issued a day earlier, the global lender said it has urged Pakistan to broaden its tax base by targeting untapped revenue sources — as the country grapples with challenges in expanding its tax collection.
The Fund said the staff visits are standard practice for countries with semi-annual programme reviews and aim to engage with the authorities and other stakeholders on the country’s economic developments and policies and the status of planned reforms.
The finance minister said that the Fund and Pakistan were engaged in a continuous dialogue as “mutual credibility and trust” is built through bilateral talks.
The minister pointed out that reforms related to taxation, energy reforms and state-owned enterprise (SOE), privatisation and public finance were on the IMF’s visit agenda.
He further said that the visiting mission took stock of the situation and held discussions on various matters, including climate resilience.
“We shared our economic road map with visiting IMF mission and how we will take it [reforms] forward,” he said, adding that the interactions would continue virtually. At the same time, he said he would also welcome another opportunity to meet IMF officials “face-to-face”.
At the outset of the presser, the finance minister said he wanted to share the developments, that came about in the past four weeks starting from the Pakistani delegation’s visit to Washington for IMF-World Bank meetings.
The delegation — which included the Finance Secretary, Economic Affairs Division Secretary, and SBP [State Bank of Pakistan] Governor — held extensive discussions with various stakeholders, including officials from the IMF, World Bank, Asian Development Bank, Asian Infrastructure Bank and International Finance Corporation, and rating agencies.
“I have been very clear right from the beginning, that we will engage with rating agencies at the highest level in the government because we need to know where we are and where we are heading,” he said.
Following “positive meetings” with Moody’s and Fitch, Aurangzeb said, they succeeded in achieving upgrades in ratings in the first quarter of this fiscal year.
Similarly, Aurangzeb said he engaged with his counterparts from Saudi Arabia, the United Arab Emirates (UAE), China, Turkiye, the United Kingdom, and the US Treasury.
The minister said the government’s prudent economic policies have resulted in a reduction of inflation from 38% to just 7% and the policy rate from 22% to 15%, while foreign exchange reserves have surged from two weeks of import cover to 2.5 months of import cover.
The finance czar said the international community, financial institutions, and rating agencies have commended the government’s efforts in leading the country’s economy from deficits to surpluses.
He further said that Prime Minister Shehbaz Sharif would also share a home-grown agenda with the nation soon on how we will take forward our economic stability. “It [the agenda] has been very well syndicated with all the stakeholders,” he added.
Concluding the presser, Aurangzeb called on all the political parties, media, and other stakeholders to join hands for charters on the environment and economy to ensure a safe and healthy future for the coming generations.
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