ISLAMABAD: Finance Minister Muhammad Aurangzeb briefed officials of a global rating agency on Monday about Pakistan’s economy and the successful agreement with the International Monetary Fund (IMF) to stabilise macroeconomic indicators.
A virtual meeting via Zoom was held five days after the Business Monitor International (BMI), a subsidiary of Fitch credit ratings firm, released its detailed analysis of macroeconomic and political variables to provide insight into emerging trends in Pakistan.
Fitch forecast that the PMLN-led coalition government would remain in office for 18 months while implementing all IMF-mandated reforms. However, the rating agency cautioned that political turbulence could impact the country’s economy.
An official announcement said that Mr Aurangzeb informed the rating agency about multilateral institutions’ confidence in financing Pakistan’s projects and briefed them about Pakistan’sStaff-Level Agreement (SLA) finalised this month with the IMF for a new medium-term programme aimed at bolstering Pakistan’s homegrown economic reforms agenda.
The minister apprised the Fitch representatives of salient features of the new programme, including setting a target of increasing tax revenues by 1.5pc of GDP in FY25 and by 3pc over the next three years. A primary surplus of 1pc of GDP will also be achieved in FY25.
During the meeting, Fitch Ratings was led by Senior Director Thomas Rookmaker and directors Asia Pacific Sovereign KrisjanisKrustins and Jeremy Zook. Senior officials of the finance ministry also attended.
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.
Mr Aurangzeb provided an extensive update on Pakistan’s current economic landscape starting with the successful completion of Pakistan’s nine-month Stand-By Arrangement with the IMF, emphasising its positive impact on the country’s macroeconomic indicators.
He highlighted Pakistan’s foreign exchange reserves reaching $9.4 billion, robust stock exchange performance, and CPI inflation at 12.6pc in June. He noted a 7.7pc increase in remittances.
Addressing fiscal reforms, Mr Aurangzeb emphasised the government’s efforts to broaden the tax base, citing a substantial 30pc increase in tax collection during FY24 compared to FY23. Furthermore, over 150,000 retailers have registered as first-time taxpayers.
IT exports crossed the $3bn mark for the first time in FY24. He reiterated the government’s commitment to further improving the tax-to-GDP ratio as part of ongoing fiscal consolidation measures.
