'Interest rates reduced significantly, further decrease possible': Finance Minister
Listen to article
Finance Minister Muhammad Aurangzeb has stated that there has been a significant reduction in interest rates and, in his opinion, there is room for further reduction.
In a press conference held in Islamabad, he said that economic stability had been achieved in the country, which is crucial for economic development.
He also noted significant improvements on the external front, with remittances expected to exceed 36 billion dollars this year.
The Finance Minister mentioned that exports are also increasing, and by the end of June, the country's foreign exchange reserves will reach $13 billion.
He added that there are no difficulties in opening Letters of Credit (LCs) or transferring profits by companies abroad. On the domestic front, inflation has significantly decreased.
Muhammad Aurangzeb further said that the reduction in inflation should be passed on to the public, and the Economic Coordination Committee (ECC) is taking measures to address inflation.
The ECC has been closely monitoring inflation and has implemented new measures to control it.
He also commented on the significant reduction in interest rates, stating that there is still room for further reduction.
Reports from PWC and the Overseas Chamber of Commerce show increased investor confidence, with local investors also making investments and the stock market seeing an increase in investment.
The Finance Minister reported that Rs870 billion worth of purchases were made during Eidull Fitr, compared to Rs720 billion last year.
He highlighted a 14% increase in cement production and a 40% increase in car sales, along with a 30% rise in motorcycle sales during the first half of the year.
Regarding the International Monetary Fund (IMF), Muhammad Aurangzeb confirmed that a staff-level agreement had been reached, and Pakistan had achieved the IMF's structural benchmarks.
He noted that this is the first time Pakistan has met these benchmarks, which included steps for national fiscal agreements and agricultural income tax collection.
The Finance Minister also mentioned that for the first time, provinces had taken steps to meet targets, and he expressed hope that the IMF's Executive Board would soon approve the second tranche of one billion dollars.
On climate change, he stated that an agreement had been reached with the IMF, and the funds will be disbursed in phases as Pakistan meets its climate change goals.
He emphasized that for the final IMF programme, full implementation of structural reforms is essential. Economic stability has already been achieved, but now the focus is on sustaining and advancing it.
Muhammad Aurangzeb shared that the tax-to-GDP ratio had been increased to 10.8% and tax collection was being enhanced.
He pointed out the benefits of the digitalization of the Federal Board of Revenue (FBR), and mentioned that the Track and Trace system had been fully implemented for sugar, fertilisers, and tobacco. However, its implementation in cement is still pending.
The Finance Minister concluded by announcing that a system will be introduced in the next fiscal year allowing salaried individuals to directly pay their income taxes, making the process easier.
Meanwhile the IMF has sent a second Corruption and Governance Diagnostic Mission to Pakistan a few months apart to hold in-depth engagements with over 30 departments and institutions, including the registrars of the Supreme Court of Pakistan (SCP) and the accountability court.
The mission, which began its interactions on Thursday, will stay in the country until April 14, according to Pakistani authorities.
The IMF's response on launching the second corruption and governance diagnostic mission since February was awaited until the filing of this story.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
6 hours ago
- Express Tribune
Govt allocates Rs600m to put man in space
Listen to article The upcoming budget is likely to see allocation of billions of rupees for Pakistan's strides in space exploration, including the country's pride project of sending its first man into space, and a Multi-Mission Communication Satellite System. The federal government has proposed the allocation of Rs24 billion to the Space and Upper Atmosphere Research Commission (Suparco) in the development budget for the next fiscal year 2025–26. The allocation includes Rs600 million for the manned space mission in the next fiscal year. According to officials, over Rs18 billion would be spent on the Multi-Mission Communication Satellite System; Rs400 million for a new Pakistan Lunar Exploration project; Rs1.8 billion for the Deep Space Astronomical project; and Rs1.7 billion for the Pakistan Optical Remote Sensing Satellite project. Read more: IMF rejects wealth tax, chicken duty Other allocations, according to the officials: more than Rs500 million would be allocated for the Special Investment Facilitation Council (SIFC); over Rs50 billion for the Cabinet Division; and Rs50 billion for schemes of members of parliament. The government plans to spend Rs134.2 million for infrastructure development in the federal capital, Rs100 million for the restoration and upgradation of the National Archives, and Rs650 million for the construction of the Hajj Complex in Lahore.
Express Tribune
21 hours ago
- Express Tribune
ADB snubs India to approve Pakistan loan
Listen to article The Asian Development Bank (ADB) on Tuesday approved an $800 million financing package for Pakistan to enhance tax collection and provide guarantees for securing foreign commercial loans by rejecting Indian objections. The Manila-based lender protected its neutrality by refusing to allow the use of the platform for settling political score by India. The ADB was under pressure from India not to approve the financing package but Pakistan being the founding member has all the rights to secure loans by fulfilling the agreed conditions. The ADB's local office announced on Tuesday that the lender approved an $800 million programme to strengthen fiscal sustainability and improve public financial management in Pakistan. The lender stated that the $300 million loan was approved for the Improved Resource Mobilisation and Utilisation Reform Programme and the first-ever policy-based guarantee of up to $500 million had also been approved, which was expected to mobilise financing of up to $1 billion from commercial banks. It was the second time in the past three weeks that India failed to block Pakistan's external loans, first in the International Monetary Fund (IMF) and then in the ADB. The Indian executive director tried to block the funding on political grounds. The Pakistani executive director apprised the board that India was financing terrorism in Balochistan and Khyber Pakhtunkhwa, according to the Pakistani authorities. The development came after India had earlier managed to postpone the approval of the $800 million financing package by the ADB for Pakistan for five days by exploiting a lacuna in the rules. The Pakistani authorities said that the Indian executive director raised the issues of high indebtedness of Pakistan and alleged that the money could be used for other than the stated purposes. The Pakistani executive director replied that India's debt was unsustainable compared to Pakistan. The Indian debt-to-GDP was 80.4% of GDP compared to Pakistan's 73.6%, according to the IMF's data. The Pakistani executive director apprised the board that India was fuelling terrorism in Pakistan by providing funding to the terrorists in Balochistan and Khyber-Pakhtunkhwa (K-P). On the point of using the ADB's funding for other than intended purposes, the board was apprised that raising such questions was tantamount to pointing fingers at the lender's financial management and showed lack of trust. The board was informed that Pakistan had necessary means and resources to protect its national integrity and it had proven it during the four-day war last month. Pakistan downed six Indian jet fighters, including Rafaels, during the conflict. The Indian chief of defence staff admitted last week that Pakistan did shoot down Indian jets but he did not disclose the number and the name of the planes. The ADB board was also apprised that Kashmiris were fighting for their right to self-determination and India should not blame Pakistan. Prime Minister's Narendra Modi's war hysteria has brought over seven-decade old unresolved issue of Kashmir into the global political and economic discourse. However, Pakistan needs to put its economic house in order by minimising reliance on foreign lenders and consultants. Many Indians work in these multilateral institutions. There is now a high time that the government should reduce its reliance on the foreign loans, particularly on budget support loans. The ADB's $800 million package is not meant for any development purposes and the money and guarantees will be used to build the foreign exchange reserves. The government had reached an understanding with two foreign commercial banks for a $1 billion loan on the back of the ADB's guarantees due to its low credit rating. The final term sheet and loan disbursement are subjected to the approval of the ADB's $500 million guarantee. Pakistan's gross reserves stand at $11.5 billion, which the government wants to increase to over $14 billion by the end of June. The ADB will charge a nominal upfront fee for giving the guarantee. Despite a recent rating upgrade, Pakistan's credit rating still remains low at B-Negative, which is two notches below the investment grade. Fitch upgraded Pakistan from a substantial default risk to a high risk of default rating. The ADB's $300 million policy loan is the second tranche under the Resource Mobilisation Programme, which the government wants to take for improving the tax collection by the Federal Board of Revenue (FBR). Pakistan had met all the prior conditions for securing the second loan tranche from the ADB. "Pakistan has made significant progress in improving macroeconomic conditions," said ADB Country Director for Pakistan Emma Fan. She added that the new $300 million programme backed the government's commitment to further policy and institutional reforms that would strengthen public finances and promote sustainable growth. "The programme supports far-reaching reforms to improve tax policy, administration, and compliance, while enhancing public expenditure and cash management," stated the ADB. "It also promotes digitalisation, investment facilitation, and private sector development," it added. These measures aim to reduce Pakistan's fiscal deficit and public debt, while creating space for social and development spending. The ADB said that the new programme is underpinned by a comprehensive support package — including technical assistance and close coordination with development partnersdesigned to help Pakistan build long-term fiscal resilience and stability.
Express Tribune
a day ago
- Express Tribune
Pakistan pushes for deeper ties with SCO
Listen to article Minister for Finance Muhammad Aurangzeb on Tuesday reiterated Pakistan's commitment and readiness to enhance cooperation under the Shanghai Cooperation Organisation (SCO) to foster economic prosperity, stability and sustainable development across the region. He reaffirmed Pakistan's strong engagement with the organsiation during a virtual address at a meeting of finance ministers and central bank governors of the SCO member states in Beijing. Emphasising the significance of Pakistan's membership of the SCO, he described the organisation as a vital platform for forging cooperation and strengthening economic ties among member countries. He called the SCO Charter and the "Shanghai Spirit" principles as guiding tenets for deepening partnerships and praised the growing SCO role in exploring opportunities for regional development. Aurangzeb highlighted that the SCO has contributed to promoting trade, investment and financial cooperation while reinforcing regional stability and prosperity. He lent Islamabad's support to proposals for undertaking more joint projects, technology transfer and capacity-building initiatives. He also emphasised the importance of digital economy and financial inclusion in driving equitable development and urged for a collective response to global challenges such as economic slowdown, widening inequality and climate change.
