- Pakistan’s economy on a path to improvement, says finance minister.
- Lower policy rates benefited business owners, Aurangzeb notes.
- Inflation has dropped to single digits, reflecting economic stability.
Finance Minister Muhammad Aurangzeb said on Saturday that the government’s move to expand the tax base reduced the burden on the national treasury.
Speaking in Faisalabad, the finance czar affirmed that Pakistan’s economy is moving towards improvement, driven by key reforms.
Aurangzeb emphasised that a lower policy rate has also benefited business owners and ongoing economic stability measures were yielding positive results. He also reiterated that inflation has decreased to single digits, providing relief to the public.
The finance minister highlighted that recent tax reforms had significantly increased revenue collection. Addressing concerns about seeking assistance from the International Monetary Fund (IMF), he noted that sustainable governance cannot rely solely on charity, stressing the importance of a strong economic framework.
Aurangzeb further underscored the need for public-private sector collaboration to drive economic growth, stating that working together is crucial for long-term progress.
The IMF recently confirmed that two of its missions will visit the country in the next two weeks; the first mission will focus on discussions regarding climate finance, while the second will carry out the first review of Pakistan’s progress under the $7 billion Extended Fund Facility (EFF), The News reported on Saturday.
Prime Minister Shehbaz Sharif-led government secured the approval of IMF’s Executive Board for a fresh loan programme in September 2024 which was followed by the disbursement of a $1.02 billion tranche.
With IMF officials in Pakistan, Islamabad will also have to evolve a broader consensus on the major contours of the next budget for 2025-26 with the lender’s staff.
If both sides fail to reach a consensus, the completion of the first review might be linked to the parliament’s approval of the budget.
As agreed, the first review and approval of a $1 billion tranche by the Executive Board of IMF is scheduled to be done by April 2025.
Earlier this week, FinMin Aurangzeb said that Pakistan was expecting $1 to $1.5 billion in climate funding from the IMF.
The second IMF mission would visit Pakistan in March for six-monthly review under the under $7 billion EFF, the finance czar said adding that all matters related to the global lender were fine.
The finance minister said the current account posted a $420 million deficit in January 2025, up 4% from $404 million in the same month last year.
However, he highlighted that the current account maintained a surplus of $682 million in the first seven months of FY25, a sharp turnaround from the $1.801 billion deficit in the same period last year.
