Finance Minister Aurangzeb says there is no plan ‘B’ except IMF

Finance Minister Mohammad Aurangzeb has said that there is no plan ‘B’ except International Monetary Fund (IMF) and we want to do the long-term program with IMF, reported 24NewsHD TV channel on Tuesday.

Speaking at the two-day Leaders in Islamabad Business Summit, Finance Minister Muhammad Aurangzeb said that a new program is being discussed with the IMF and the IMF's 9-month program supported the economy of the country and discussions with IMF were positive.

Finance Minister said that IMF mission will come to Pakistan by mid-May and discussions regarding financing of new program will be held.

He said IMF program is a program of Pakistan and no one is doing anything to us.

The Finance Minister said that staff level agreement with IMF is likely to be done in June or July and we are going in 24th IMF program.

He said it is too early to say whether there will be any program even after this.

The finance minister said that last year we had $3.4 billion in state bank reserves, which was only 15 days worth of imports and now we have $8 billion in financial reserves and there is hope for further improvement.

The finance minister said that measures have been taken to bring inflation under control as a result the rate of inflation has decreased compared to last year as last year the rate of inflation was up to 38 percent and this year the number of rate of inflation has decreased to around 20 percent.

He said digitization underway in Federal Board of Revenue (FBR) and international consultant appointed in FBR this month.

Investments will be made in other sectors besides Recodek. Investments can be increased in agriculture and IT sectors and IT exports should be increased, he added.

Muhammad Aurangzeb said that Saudi Arabia wants to make foreign investment of five billion dollars this year.

“Panda bonds will be issued this year”, he added.

Mohammad Aurangzeb said that he does not  want to talk about interest rate as interest rate is the authority of monetary policy.

Mohammad Aurangzeb said that as inflation decreases, the policy rate will come down and the policy rate will gradually improve.

Mohammad Aurangzeb said that we need structural reforms, the tax-to-GDP ratio is 9 percent and it needs to be increased, reforms in the energy sector are also necessary, all ministries are working on privatization of government-owned companies.

There is a lack of policy and enforcement in taxation and the desired tax ratio cannot be achieved without strengthening the enforcement element, he said adding tax cases are in the tribunals which have not been decided and the law minister will ask the tribunals to decide the tax cases in three to four months.

He said that the government has set a target to control the current account deficit and fiscal deficit, agriculture GDP growth at 5 percent level.

The finance minister said that bumper crop is expected in agriculture this year, work is being done for reforms in institutions, there will be reforms in FBR to increase tax collections.

Later, Finance Minister Muhammad Aurangzeb while talking to the media said that the IMF Executive Board meeting will be held this week, the IMF delegation will come to Pakistan in mid-May to negotiate on the new loan program, related to electricity and gas prices. We will proceed on our priorities, registration of traders will be done in the trader friendly scheme very soon, hopefully the scheme will improve, there is no concern in this regard.