ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Tuesday Pakistan’s foreign exchange reserves would reach $9-10 billion by June 2024.
While talking to mediapersons after his address at “Leaders in Islamabad Business Summit 2024 collaborating for Growth,” the finance minister said the traders scheme would be successful and sounded hopeful that this scheme would bring about improvement.
When asked about the increase in electricity and gas prices, the minister said the government had its own priorities with respect to electricity and gas prices.
Earlier, addressing the Summit, the finance minister said that Pakistan’s foreign exchange reserves after receiving one billion dollars from the IMF would reach $9 billion and by the end of June, foreign exchange reserves are expected to reach $10 billion and dispelled the impression of low growth in the IMF programme, adding that agriculture and livestock in the IMF programme can boost economic growth. He said that it is not possible to state anything with certainty about the size of the IMF’s next programme.
Aurangzeb added that the IMF programme is essential for economic stability and reforms. He said that the IMF delegation would come to Pakistan next month.
He emphasized that tax-to-GDP ratio is needed to be increased to 13 percent in the next few years, adding that to fix the economy, the government would take the decisions and ensure their implementation. The minister expressed dismay that over Rs1,700 billion in tax cases are stuck in various forums due to litigation and wanted an early resolution of these cases. He added that the track and trace system would be strengthened.
The finance minister said that the government is working on the privatisation of electricity distribution companies and several steps have also been taken with regard to the privatisation of the PIA. He said that discussions are also in progress with regard to Islamabad Airport services.
He said that the inflation rate is decreasing in Pakistan.
Aurangzeb was optimistic that the new projects in the mining sector would bring investment as there are bright prospects for foreign direct investment in the country.
He said that the FDI was affected due to Pakistan’s rating and a discussion in detail was held with the rating agencies.
The finance minister said that Pakistan is one of the most affected countries in terms of climate change and a large population has been harmed in various ways so far. He said that the government would make investments and ensure capacity building in every sector as these measures would help the country to get the status of a middle-income country.
He said that positive talks were held with the IMF in Washington and an agreement with the Fund is expected by the end of June or the beginning of July.
Meanwhile, according to a statement of the Finance Ministry, Aurangzeb said that the government has taken steps to stabilise the economy and promote growth opportunities, efficiency of agriculture and industry is expected to improve and GDP is expected to grow by 2.6 percent in the fiscal year 2024. Inflation is estimated at 24 percent, down from 29.2 percent in the fiscal year 2023 and the current account deficit and fiscal deficit are likely to remain within sustainable limits.
The government has taken measures to improve the efficiency of the agricultural sector, production of major crops is exceptional, agricultural loan disbursement increased by 33.6 per cent during July-February 2024. There will be a positive impact on the industrial sector due to better crops.
The finance minister continued that the government has taken measures to control inflation, CPI inflation reached 20.7 per cent y-o-y in March 2024 from 35.4 percent in the same month last year, the government is taking measures to control the pressure of inflation and provide relief to the weaker sections of the society.
He added that tax collection has increased due to government measures, FBR’s tax collection increased by 30.2 percent during July-March fiscal year 2024, the FBR collected more than the target of Rs6,707 billion.
Additionally, the current account deficit has been reduced as a result of government measures, current account deficit narrowed by 74 percent to $1 billion during July-February 2024, compared to $3.9 billion deficit last year, trade deficit narrowed by 24.9 percent to $17 billion during July-March fiscal year 2024 compared to $22.7 billion last year and foreign exchange reserves increased to $13.3 billion as on April 16, 2024, from $9.7 billion in June 2023.
The SBP has kept the policy rate unchanged at 22 percent from June 2023 to contain inflationary pressures.
He added that the government is promoting the development of the agriculture and industrial sector by focusing on solarisation, youth entrepreneurship, promotion of the IT sector, SMEs, investment export facilitation, and industrial production. The government is also taking steps to attract foreign investment and accelerate economic growth.
The economic outlook is positive due to active government initiatives and better coordination with development partners, the Ministry of Finance in collaboration with the FBR and the Ministry of Law is taking steps to raise revenue, the government is working on reforms in SOEs, the PIA reforms are in progress, and the government is also taking privatisation initiatives at a fast pace, the statement concluded.
Copyright Business Recorder, 2024
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