On Sunday, Finance Minister Muhammad Aurangzeb stated that “prudent economic policies” had produced significant gains and that the administration was dedicated to enhancing the nation’s economy by building on the hard-won macro-stability.
Citing recent data on declining inflation and rising foreign exchange reserves, he told reporters in Islamabad on Sunday that the government’s “prudent economic policies” had produced notable progress.
According to state station Radio Pakistan, he stated, “[There is a] reduction of inflation from 38 percent to just seven percent and the policy rate from 22 percent to 15 percent, while foreign exchange reserves have surged from two weeks of import cover to 2.5 months of import cover.”
“The international community, financial institutions, and rating agencies had commended the government’s efforts in leading the country’s economy from deficits to surpluses,” he said, describing the talks that took place between the Pakistani delegation and the various multilateral institutions during his October visit to Washington, DC.
Additionally, he stated that he met with representatives of many rating agencies and interacted with peers from the United Arab Emirates (UAE), Saudi Arabia, China, Turkiye, and the US Treasury.
“We were given a platform there to share with the comity of nations about how we achieved this turnaround in just 14 months,” the finance minister stated.
Speaking on the recent visit of the International Monetary Fund (IMF) delegation to Pakistan, he stated that talks on the agenda for privatization, public finance, and energy and SOE reforms were part of an ongoing dialogue process.
“These exchanges and conversations are essential for mutual credibility and trust,” he stated. “We have communicated to the IMF our dedication to the federal government’s rightsizing.”
Days after the IMF personnel visited Pakistan from November 12 to November 15, the finance minister gave his speech.
On Saturday, the international lender expressed agreement with the Pakistani government over the necessity of giving provinces “greater social and development responsibilities.”
The unplanned visit was too early for the first review of the Extended Fund Facility (EFF), which is due in the first quarter of 2025, but it covered a $7 billion bailout within six weeks of the IMF board’s approval.
Strict adherence to taxes
He stated that the government was strict about compliance and enforcement with regard to revenue and taxes, and that each sector would have to fulfill its responsibilities in this respect.
“The conversations with the IMF regarding revenue and taxation were extremely constructive,” he stated.
The finance czar acknowledged earlier this month that the salaried class was already overloaded and that expanding the tax net should be the ultimate objective rather than raising taxes.
He had stated that “nations do not and cannot run on charity or donations,” and that taxes were necessary for the economy to maintain long-term growth.
However, he acknowledged that these segments were already saturated. He had stated that “we cannot afford to tax the same [classes] more who have already been taxed at a level which is not sustainable anymore.”
Existential concerns
In addition, the minister emphasized the importance of discussing the nation’s existential problems, citing “unchecked population growth and the climate emergency” as two examples.
“This is not just a charter of the economy, but also a charter of the environment,” someone stated yesterday, and I agree with them.
This is not something we can take seriously,” Aurangzeb stated. We are questioned about the IMF today, but we ignore population and climate resilience, despite the fact that they are equally significant.
He urged everyone to approach these problems with equal urgency.
