Reforms underway in energy sector, SOEs

Minister for Finance and Revenue Muhammad Aurangzeb on Wednesday highlighted the reforms undertaken in Pakistan’s energy sector and state-owned enterprises (SOEs) including the privatisation of state companies.

At a meeting with a delegation of Standard & Poor’s (S&P) Global Ratings at the Finance Division, the minister underscored the confidence shown by multilateral institutions through the provision of financing for various projects in Pakistan.

The S&P delegation was led by Directors of Sovereign and International Public Finance Ratings Yee Farn Phua and Andrew David Wood.

Aurangzeb gave an update on Pakistan’s current economic situation where he outlined the successful completion of a nine-month standby arrangement with the International Monetary Fund (IMF) and the improving macroeconomic indicators.

These indicators included the building up of foreign exchange reserves to $9.4 billion, robust performance of the stock exchange, declining trend of inflation with the Consumer Price Index (CPI)-based inflation
coming down to 12.6% in June and increase of 7.7% year-on-year in remittances from overseas workers.

He emphasised the government’s efforts to broaden the tax base as tax collection surged 30% during fiscal year 2023-24 and to further improve the tax-to-GDP ratio.

At present, Pakistan is holding talks with the IMF for a new medium-term programme to support the country’s economic reform agenda.

Finance secretary, who was present in the meeting, reiterated the stable and optimistic outlook and elaborated on the economic reforms of the government, which were reflected in the FY25 budget.

The S&P delegation appreciated the fiscal measures adopted by the government of Pakistan and acknowledged the improvement in economic indicators.