Current IMF programme to be final one for Pakistan: Finance Minister Muhammad Aurangzeb

Federal Minister for Finance Muhammad Aurangzeb stated that a program has been finalised with the IMF, and this current program will be the last.

He emphasised that in order to join the G20, the economy must be formalised, according to Express News.

The International Monetary Fund on Wednesday approved a $7 billion new bailout package after Pakistan promised to overhaul its agriculture income tax, transfer some fiscal responsibilities to provinces and agreed to limit subsidies.

Having taken over 20 loans from the IMF since 1958, Pakistan remains the fifth-largest debtor. As part of the deal, Pakistan agreed to a number of unpopular measures, including increasing the amount of tax it collects from people and businesses.

During a press conference in Islamabad, the Finance Minister mentioned that increasing tax revenues is imperative, noting that microeconomic stability is not an end goal but a pathway. He rejected the offer of treasury bills and bonds for domestic borrowing.

He asserted that the Pakistani economy is moving in the right direction and is on the path to improvement; however, experts will be sought from abroad for the country’s betterment.

Muhammad Aurangzeb also noted that the country’s foreign exchange reserves have increased, reaching their highest level. He highlighted significant growth in both national exports and IT exports, and stated that investor confidence regarding the strength of the economy is a major success.

He stated that the policy rate has been reduced by 4.5%, and expressed optimism that the exchange rate and policy rate will remain as expected.

Muhammad Aurangzeb mentioned that there were approximately 300,000 new taxpayers last year, and so far this year, 732,000 new taxpayers have registered, increasing the total number of taxpayers in the country from 1.6 million to 3.2 million. Non-filers will no longer be able to purchase property or vehicles.

He added that work is ongoing on right-sizing within ministries, with the decision to close six ministries set to be implemented, while two ministries will be merged. Additionally, 150,000 posts across various ministries will be eliminated.

Muhammad Aurangzeb stated that inflation has decreased, and this is not just a hollow claim; due to government policies, inflation has dropped to single digits.

The finance minister mentioned that he had urged the provincial chief ministers to take measures to reduce inflation. He noted that since the prices of petroleum products have decreased in the country, transportation fares should also be reduced accordingly.