ISLAMABAD: Pakistan’s finance minister, Muhammad Aurangzeb, said on Monday the South Asian country aimed to increase its revenue by 1.5 percent of the gross domestic product this fiscal year under a new $7 billion loan deal with the International Monetary Fund (IMF).
The Pakistani finance minister said this during a virtual meeting with representatives of Fitch Ratings agency, including Senior Director Thomas Rookmaker, and Directors Asia Pacific Krisjanis Krustins and Jeremy Zook.
The discussions encompassed ongoing reforms in the energy sector and state-owned enterprises, including privatization and “rightsizing” of government entities to streamline operations and improve governance, according to the finance ministry.
Aurangzeb informed the rating agency about multilateral institutions’ confidence in financing Pakistan’s projects and briefed them on the staff-level agreement reached with the IMF this month to bolster Pakistan’s homegrown economic reform agenda.
“The Federal Minister apprised the Fitch representatives of salient features of the new program which includes setting a target of increasing our revenues by 1.5 percent of GDP in FY 2025 and by 3 percent over the coming 3 years,” the finance ministry said in a statement. “A primary surplus of 1 percent of GDP will also be achieved for FY 2025.”
He provided an extensive update on Pakistan’s current economic landscape and highlighted Pakistan’s foreign exchange reserves had reached $9.4 billion, robust stock exchange performance, and CPI inflation recorded at 12.6 percent in June.
The minister noted a 7.7 percent rise in foreign remittances and emphasized the government’s efforts to broaden the tax base, citing a 30 percent increase in tax collection during the outgoing fiscal year as compared to previous year.
“More than 150,000 retailers have registered as first-time tax payers. The IT exports crossed the figure of USD 3 billion,” Aurangzeb was quoted as saying by his ministry.
Pakistan’s new government presented its first budget in parliament last month, setting an ambitious tax collection target. Aurangzeb said at the time Pakistan wanted to collect Rs13 trillion ($44 billion) in taxes, which would be 40 percent more than the outgoing fiscal year.
“The representatives from Fitch Ratings appreciated the ambitious targets and fiscal measures adopted by the Government of Pakistan and acknowledged the improvement in economic indicators,” the finance ministry added.
Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister
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Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister
- The statement came during Finance Minister Muhammad Aurangzeb’s virtual meeting with representatives of Fitch Ratings agency
- The discussions encompassed reforms in energy sector and state enterprises, including privatization and ‘rightsizing’ of entities
Pakistan PM calls PIA privatization ‘vote of confidence’ as government pushes reforms
- The loss-making national flag carrier was sold to a Pakistani consortium for $482 million after two failed attempts
- Finance minister vows to continue economic reforms, engage international partners through trade and investment
KARACHI: Prime Minister Shehbaz Sharif said on Tuesday the privatization of state-owned Pakistan International Airlines marked a “vote of confidence” in the country’s economy, as the government presses ahead with structural reforms aimed at easing pressure on public finances and attracting investment.
The sale of the loss-making national carrier by a Pakistani consortium, which secured a 75 percent stake for Rs135 billion ($482 million), follows two previous attempts to privatize PIA. The development comes as Pakistan seeks to build on macroeconomic stabilization after a prolonged balance-of-payments crisis, with authorities trying to shift the economy toward export-led growth and policy continuity.
“It was our firm commitment to the people of Pakistan that speedy and concrete steps would be taken to privatize loss-making state-owned enterprises that have been a burden on the economy,” Sharif said in a post on X. “The successful completion of the transparent and highly competitive bidding process for the privatization of PIA marks an important milestone in fulfilling that commitment.”
“The strong participation of our leading business groups and some of Pakistan’s most seasoned and respected investors is a powerful vote of confidence in our economy and its future,” he added.
The government has made privatization of state-owned enterprises a key pillar of its reform agenda, alongside changes to taxation, energy pricing and trade policy, as it seeks to stabilize the economy and restore investor confidence.
Meanwhile, Finance Minister Muhammad Aurangzeb told an international news outlet Pakistan had reached a critical turning point, with macroeconomic stability and sustained reforms helping shift the economy from stabilization toward growth.
“Macroeconomic stability, sustained reforms and policy continuity are restoring confidence, shifting the economy from stabilization to export-led growth,” he said in an interview with USA Today, according to a statement issued by the finance ministry, adding that the government was opening new opportunities for domestic and global investors.
Aurangzeb said inflation had eased sharply, external balances had improved and foreign exchange reserves had risen above $14.5 billion, while Pakistan had recorded both a primary fiscal surplus and a current account surplus for the first time in several years.
The finance minister noted that economic growth remained insufficient to meet the needs of a fast-growing population, pointing out the importance of continuing structural reforms and encouraging investment in sectors such as agriculture, minerals, information technology and climate resilience.
Despite ongoing risks from global commodity prices, debt pressures and political uncertainty, Aurangzeb said the government remained committed to staying the reform course and engaging international partners through trade and investment.
