Team coming by Sept-end: $1bn 3rd IMF tranche anticipated: Aurangzeb

Business Recorder

3 days ago

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Wednesday that an International Monetary Fund (IMF) delegation will visit Pakistan at the end of September, with the country expecting to receive the third tranche of $1 billion upon completion of the next review.
This he stated during an informal talk with media on the occasion of 'Independence Day Celebrations,' organised by Rawalpindi Chamber of Commerce and Industry (RCCI) here on Wednesday.
Preparations for the upcoming economic review were complete, he added.
IMF projects Pakistan's GDP growth at 3.6% for FY26, below govt target of 4.2%
Addressing the business community, Aurangzeb said that there was scope for further cut to policy rate during the ongoing calendar year, pointing to a decline in average and core inflation.
'At present, the policy rate is at 11 percent. I am always very careful that the policy rate and the market-based exchange rate are very much the purview of the central bank, the State Bank of Pakistan, and the Monetary Policy Committee,' Aurangzeb added.
'Having said that, my own view, and I am giving my personal view here, is that given the current inflation, whether it is the average inflation or the core inflation, I do think there is room to do more in terms of the policy rate, and I am very hopeful that during the course of this calendar year we will see movement in the policy rate,' he added.
The finance minister said that national security and economic stability are interdependent. 'Over the past 18 months, significant steps have been taken to boost revenue, stabilise the rupee, and reduce the policy rate,' he said, adding agricultural loans have surpassed Rs2.5 trillion, debt servicing reached Rs1.0 trillion last year.
The minister said the government had finalised economic growth-focused agreements with the IMF, reached a favourable tariff deal with the United States, and was working on key accords with China.
Panda bonds would be issued by year-end, and a benchmark for Sukuk bonds had been set, the finance minister added. 'We are heading in the right direction,' said the minister, adding that the government was committed to providing a better environment for the business community and encouraging the private sector to lead the economy. 'Our economic and financial achievements are being recognised globally. There is hope for further improvement in the coming days.'
The minister said company registrations had risen by 250,000, loans to the private sector were up 38 percent, and the government had paid one trillion rupees in debt servicing over the past year. He also pointed to reduced electricity tariffs, expected improvements in energy costs, and ongoing reforms in tax administration. He assured that taxation reforms would not burden the salaried class and that the prime minister was personally overseeing FBR's transformation. Monthly meetings with chambers would be held to address business concerns.
The finance minister said that once fiscal discipline is achieved, the government's borrowing requirement will decrease, and bank and other economic institutions will reach out to the private sector. He added that the government had reduced its debt servicing by Rs1tr in the past year. 'God-willing, our debt servicing will go down by more than 1tr this year as well.'
Aurangzeb said; 'We are getting our house in order, which is the federal government. And therefore, it is important that you also take whatever efforts you are making towards the private sector.' 'On the financing costs, we have moved in the right direction. On the energy side, we are beginning to move in the right direction.
'On the taxation side, the fiscal space we had and whatever we could do in this budget, I am very clear in terms of the direction of travel. We need to bring taxation to a regional competitive level,' he added, stressing that expanding the tax nets and closing the loopholes were necessary for that.
Aurangzeb affirmed that the government, under Prime Minister Shehbaz Sharif's leadership, is prioritising a business-friendly environment. He said that consumer confidence is at its peak, economic growth is at record levels, and privatisation of state-owned enterprises will accelerate this year.
Aurangzeb highlighted there had been a 'record increase' of 65,000 new investors who have come into the PSX over the last year. Company registrations' annual levels had also gone above 250,000, the minister said, terming both developments as a 'big structural change.'
Talking about the structural reforms, the minister pointed out the ongoing tariff reforms, which he said were taking place for the first time in Pakistan's history. Aurangzeb also pledged further reduction in energy costs due to the savings from the revised agreements with 27 independent power producers earlier this year.
He highlighted that the reforms aim to explore how to reduce the costs of raw materials and intermediate products so that Pakistan could become an export-led economy.
Aurangzeb said the federal government had begun a right-sizing process for 45 ministries and departments, and the privatisation of state-owned enterprises would accelerate. Pointing out that international financial institutions had hailed Pakistan's economic reforms, and that Fitch and S&P Global Ratings had upgraded the country's credit ratings this year, he added.
RCCI marked Pakistan's 78th Independence Day with a flag hoisting ceremony and 'Marka e Haq' celebrations. Federal Minister for Finance, Muhammad Aurangzeb, attended as the chief guest. The event also featured the cutting of an Independence Day cake.
RCCI President Usman Shaukat lauded Pakistan's journey of resilience, sacrifice, and hope over the past 78 years. Highlighting recent improvements in economic indicators, he urged the government to further lower interest rates to single digits, reduce electricity and gas tariffs, and cut tax rates to stimulate business activity and job creation.
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