Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, announced on Tuesday that the government is nearing the finalisation of external financing assurances, a crucial step toward securing the $7 billion loan from the International Monetary Fund (IMF).
Speaking at a briefing, Aurangzeb expressed confidence that the IMF’s Executive Board would approve the programme soon, acknowledging the support from provincial governments.
Aurangzeb reiterated Prime Minister Shehbaz Sharif’s assertion that this would be Pakistan’s last programme with the IMF, underlining the necessity of implementing structural reforms to ensure long-term economic stability.
In July, Pakistan and the IMF reached a staff-level agreement on a 37-month Extended Fund Facility (EFF) worth around $7 billion. However, the programme’s approval by the IMF’s Executive Board is contingent on Pakistan securing financing assurances from its development partners, a process that is still ongoing.
Pakistan is actively working to secure a rollover of $12 billion in loans from key allies, including China, Saudi Arabia, and the UAE. Additionally, the country has requested an extra $1.2 billion loan from Saudi Arabia to address a $2 billion financing gap.
Aurangzeb highlighted improvements in economic indicators, noting that the government has cleared all pending payments, including import letters of credit and profit remittances.
He pointed out that inflation has decreased to 9.6 per cent in August 2024 from 23.7 per cent in the same period last year, leading to a gradual reduction in the policy rate, which is providing relief to the industrial sector.
The Minister also cited improvements in Pakistan’s credit ratings by agencies like Fitch and Moody’s as evidence of the economy’s positive trajectory.
On tax collection, Aurangzeb emphasised the government’s determination to increase revenue, noting that a significant portion of the economy contributes minimally to the tax base. He stressed the need for broader tax compliance and assured that the Federal Board of Revenue (FBR) has simplified the tax filing process.
Despite a shortfall of Rs 98 billion in tax collection during the first two months of the fiscal year, he reaffirmed the government’s commitment to not delay necessary processes.
Aurangzeb also addressed rightsizing the federal government and introduced plans for a new subsidy mechanism aimed at enhancing transparency.
He reassured stakeholders that any decisions regarding the Utility Stores Corporation (USC) would be made with employee and stakeholder interests in mind, emphasising the government’s commitment to protecting jobs and well-being.
