Pakistan’s Finance Minister Muhammad Aurangzeb has predicted a positive economic outlook in the ongoing fiscal year. Speaking at the 2024 Islamabad Business Summit, Aurangzeb said foreign exchange reserves have increased and are expected to reach $10 billion by June. He emphasized the need for reforms in the energy sector and highlighted the significance of privatizing loss-making enterprises.
On the issue of seeking another bailout programme from the International Monetary Fund (IMF), Aurangzeb termed it “crucial” and remarked that reaching out to the Washington-based lender is often the “last option” for a country. His remarks come days after Islamabad made a formal request to the IMF for a new bailout package in the range of $6 to $8 billion under Extended Fund Facility (EFF) with the possibility of augmentation through climate financing.
In an interview with The National a day earlier, the FinMin noted that the IMF has been very receptive in terms of agreeing to consider a larger, longer programme. However, the exact size and time-frame will only be determined after evolving consensus on the major contours of the next programme in May 2024. Pakistan has shown its interest and also made a request to dispatch the IMF review mission in May 2024 to firm up details of the next bailout package of three years period under EFF programme.
Despite the government’s optimistic projections, the IMF, in its latest Regional Economic Outlook (REO), released by the Middle East and Central Asia (ME&CA) department stated that Pakistan’s external buffers deteriorated, mostly reflecting ongoing debt service, including Eurobond repayments.
Aurangzeb outlined the government’s expectations for the current fiscal year, with a GDP growth of 2.6%, increased foreign investment, and reduced current account and fiscal deficits. He highlighted the government’s efforts to rein in inflation, resulting in increased tax collection and a reduction in the current account deficit.
The minister also noted that the country’s foreign exchange reserves have increased and the Pakistan stock market is at its highest level in history. He emphasized steps taken to improve the performance of the agriculture sector, which has a growth rate of 5%. Commenting on the improved revenue generation, Aurangzeb said that the Federal Bureau of Revenue (FBR) has witnessed a significant 30.2% increase in its tax collection.
