Finance Minister Muhammad Aurangzeb has stated that there has been a significant reduction in interest rates and, in his opinion, there is room for further reduction.
In a press conference held in Islamabad, he said that economic stability had been achieved in the country, which is crucial for economic development.
He also noted significant improvements on the external front, with remittances expected to exceed 36 billion dollars this year.
The Finance Minister mentioned that exports are also increasing, and by the end of June, the country’s foreign exchange reserves will reach $13 billion.
He added that there are no difficulties in opening Letters of Credit (LCs) or transferring profits by companies abroad. On the domestic front, inflation has significantly decreased.
Muhammad Aurangzeb further said that the reduction in inflation should be passed on to the public, and the Economic Coordination Committee (ECC) is taking measures to address inflation.
The ECC has been closely monitoring inflation and has implemented new measures to control it.
He also commented on the significant reduction in interest rates, stating that there is still room for further reduction.
Reports from PWC and the Overseas Chamber of Commerce show increased investor confidence, with local investors also making investments and the stock market seeing an increase in investment.
The Finance Minister reported that Rs870 billion worth of purchases were made during Eidull Fitr, compared to Rs720 billion last year.
He highlighted a 14% increase in cement production and a 40% increase in car sales, along with a 30% rise in motorcycle sales during the first half of the year.
Regarding the International Monetary Fund (IMF), Muhammad Aurangzeb confirmed that a staff-level agreement had been reached, and Pakistan had achieved the IMF’s structural benchmarks.
He noted that this is the first time Pakistan has met these benchmarks, which included steps for national fiscal agreements and agricultural income tax collection.
The Finance Minister also mentioned that for the first time, provinces had taken steps to meet targets, and he expressed hope that the IMF’s Executive Board would soon approve the second tranche of one billion dollars.
On climate change, he stated that an agreement had been reached with the IMF, and the funds will be disbursed in phases as Pakistan meets its climate change goals.
He emphasized that for the final IMF programme, full implementation of structural reforms is essential. Economic stability has already been achieved, but now the focus is on sustaining and advancing it.
Muhammad Aurangzeb shared that the tax-to-GDP ratio had been increased to 10.8% and tax collection was being enhanced.
He pointed out the benefits of the digitalization of the Federal Board of Revenue (FBR), and mentioned that the Track and Trace system had been fully implemented for sugar, fertilisers, and tobacco. However, its implementation in cement is still pending.
The Finance Minister concluded by announcing that a system will be introduced in the next fiscal year allowing salaried individuals to directly pay their income taxes, making the process easier.
Meanwhile the IMF has sent a second Corruption and Governance Diagnostic Mission to Pakistan a few months apart to hold in-depth engagements with over 30 departments and institutions, including the registrars of the Supreme Court of Pakistan (SCP) and the accountability court.
The mission, which began its interactions on Thursday, will stay in the country until April 14, according to Pakistani authorities.
The IMF’s response on launching the second corruption and governance diagnostic mission since February was awaited until the filing of this story.
