ISLAMABAD: Prime Minister Shehbaz Sharif has formed eight specialized working groups comprising top business leaders to craft policy blueprints for economic revival — but their proposals will be weighed within the strict limits of the Memorandum of Economic and Financial Policies (MEFP) signed with the International Monetary Fund (IMF).
Minister of State for Finance Bilal Azhar Kayani said this while addressing a news conference here on Monday. He also announced that a breakthrough in the privatisation of Pakistan International Airlines (PIA) is expected next month.
Admitting further room for improvement in the business environment, cut in tax rate, electricity prices, Kayani said that export-led growth was essential to stabilise the economy and get a permanent solution to the boom-bust cycle, and acquire repeated IMF programmes.
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The government has now had to bring sustainable economic growth for the economy through export-led growth and is now fully committed to finding a permanent solution, he said.
Kayani highlighted the improvement in the country’s economy over the last 1.5 years, saying that the target of primary balance was achieved, besides registering a 26 per cent increase in tax collection during the last fiscal year despite modest gross domestic product (GDP) growth and a low inflation rate.
“We also increased the Federal Bureau of Revenue (FBR’s) tax-to-GDP ratio and decreased the inflation from 23 percent to 4.5 percent,” Kayani added. The ratio, he specified, saw a 1.4 percent increase in taxes, going from 8.8 percent to around 10.2 to 10.3 percent.
“We posted the first current account surplus in 14 years, which is also the largest current account surplus in 22 years,” he said, adding that foreign exchange reserves were one of the most important parts of the economy.
“When the current account is in surplus, our foreign exchange reserves are stabilised,” Kayani explained, pointing out that the policy rate had been halved, going from 22 percent to 11 percent, as a result of controlling inflation.
The minister said the target of the primary balance had been achieved despite no mini budget last year. Talking about the privatisation of First Women Bank Ltd (FWBL) earlier this month, Kayani said that the process of privatization of electricity distribution companies is under way.
Kayani said PM Shehbaz also believed the country needed private sector-led growth, adding that the government had to play its role with respect to policy-making and facilitation.
Prime Minister met with business people last week for three hours, where, all the business community stakeholders were fully heard and recommendations were taken from them. He said the business community gave recommendations for a comprehensive strategy to increase the country’s exports and export-led economic growth. The Prime Minister also decided to form working groups to evolve a comprehensive strategy for sustainable economic growth in the country.
Kayani said that working groups were also formed regarding income tax, customs tariff, exports, and separate groups were also formed for energy, railways, ports, agriculture, and industry.
Giving priority to the private sector of the economy, he said the chairmanships of all these working groups have been given to people from the private sector, and recommendations of the working groups will be placed before the Prime Minister, Shehbaz Sharif.
Kayani said the government wants to make agriculture a source of exports too, to achieve sustainable economic growth in the country. He further said that they want to reduce taxes, reduce the price of energy, as the working group will submit its recommendations by November 15, and proposals for economic recovery will be presented to the Prime Minister. However, replying to a question that these proposals would be considered while keeping in view the MEFP signed with the IMF.
Talking about infrastructural projects, he said that the target is to complete both sections of ML-1 by 2028. He said that the Karachi-Rohri railway section will be completed by December 2028 and that this section will be inaugurated next year. Discussions are under way with a company for the upgrade of the railway line from Rohri to Nawkundi.
He said that the Asian Development Bank (ADB) is likely to finance the project with USD 2 billion. He said that the railway line will be upgraded as soon as mining begins at Reko Diq. He said that work is being done to activate and rationalise the National Tariff Commission, as well.
He said that the government is committed to a conducive environment for bridging Foreign Direct Investment (FDI), and there is also room for progress in the investment environment in the country. He said that current macroeconomic stability is a joint effort of all institutions of the country, and the government has taken comprehensive Policy measures for the revival of the economy.
Replying to a question regarding a package for flood-affected people by the Punjab government, the minister said that the provincial government would achieve its surplus target while maintaining its expenditure.
Copyright Business Recorder, 2025
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