Finance czar Aurangzeb links current economic 'stability' to successful IMF deal

Finance Minister Muhammad Aurangzeb has attributed the current economic stability of Pakistan to the successful completion of a standby agreement with the International Monetary Fund (IMF), initiated by Prime Minister Shehbaz Sharif and successfully completed by the caretaker government.

Speaking to a delegation of investors led by Barclays at the Finance Division on Tuesday, the finance minister emphasized that the government’s primary focus is to ensure essential reforms in the economic structure, including energy, state-owned enterprises, privatization, the tax system, and a reduction in the size of government.

The finance czar assured that the reform process within the economic framework will continue.

“In the past, Pakistan was perceived as a country that received only one tranche, its time to dispel this notion and consistently implement the targets set under the IMF program to make Pakistan's economic stability sustainable,” Minister Aurangzeb stated.

He highlighted that this agreement has paved the way for a larger and long-term IMF program to further solidify economic stability and implement necessary reforms in the economic structure.

FinMin Aurangzeb noted a significant achievement of this stability, “The government cleared letters of credit and import bills until May and June, along with nearly $2 billion in profit and dividend payments.”

The finance minister pointed out that the new fiscal year commenced with a clean slate, and the current account deficit remained under control during the first three months, largely due to an increase in remittances, income from Roshan Digital Accounts (RDA), and a notable rise in the services sector, including IT exports.

He also shed light on the improvement in Pakistan's rating by global credit rating agencies and the government's plans to access international capital markets.

Aurangzeb added that the government seeks to encourage banks to lend to the private sector on a neutral basis, particularly emphasizing incentives provided to promote agriculture, IT, and the SME sector.

In response to a question from the delegation, he remarked that a decrease in the inflation rate from a peak of 38% to 6.9% in September signifies robust economic recovery.

The Barclays investor delegation commended the finance minister for his comprehensive briefing on the Pakistani economy and expressed positive reactions to the stability and economic reforms visible in the country.

The delegation also showed interest in investment and business cooperation opportunities within the Pakistani economy.

During the meeting, the investors were informed about the government’s economic reforms and policy measures over the past 12 months.

The minister highlighted key economic indicators related to economic stability, including a reduction in the current account deficit, a stable exchange rate, foreign exchange reserves, and inflation, which he termed the "big issue" of the year.