Finance Minister Aurangzeb briefs Fitch Ratings on economic reform agenda

 Finance Minister Muhammad Aurangzeb has updated Fitch Ratings representatives about Pakistan’s recent staff-level accord with the International Monetary Fund (IMF) and outlined various measures aimed at bolstering the economy, reported 24NewsHD TV channel.

During the briefing, conducted via Zoom, Finance Minister highlighted the positive effects of the agreement with the IMF on Pakistan’s macroeconomic health.

The meeting, led by Fitch Ratings Senior Director Thomas Rookmaker and Directors Asia Pacific Sovereign Krisjanis Krustins and Jeremy Zook, was attended by senior Finance Ministry officials.

During the virtual meeting, Aurangzeb informed Fitch representatives that Pakistan plans to increase revenues by 1.5 percent of GDP in FY 2025 and by 3 percent over the subsequent three years. He also projected achieving a primary surplus of 1% of GDP for FY 2025.

Aurangzeb highlighted Pakistan’s $9.4 billion foreign exchange reserves, strong stock market performance, and the 12.6% inflation rate in the CPI for June 2024. He also noted a 7.7% increase in foreign remittances. Discussing fiscal reforms, Aurangzeb emphasised the government’s efforts to broaden the tax base, reporting a substantial 30% rise in tax collection in FY 2024 compared to the previous year.

He mentioned that over 150,000 retailers have registered as first-time taxpayers. “The IT sector exports have surpassed USD 3 billion,” Aurangzeb stated, reiterating the government’s commitment to improving the tax-to-GDP ratio as part of ongoing fiscal consolidation efforts.

The conversation also covered ongoing reforms in the energy sector and State-Owned Enterprises, including the privatisation and streamlining of federal government entities to enhance governance and efficiency.

Aurangzeb conveyed to Fitch the confidence multilateral institutions have in financing Pakistan’s projects. Fitch Ratings representatives commended the ambitious targets and fiscal measures adopted by Pakistan, acknowledging the improvement in the country’s economic indicators.

Finance Minister told the Fitch officials that there has been a reduction in inflation and financial reserves have stabilized. He said remittances have increased by 7.7 percent in the last financial year.

Finance Minister said more than one and a half lakh retailers have been registered as taxpayers while the imports of IT sector have crossed 3 billion dollars.

Reporter: Waqas Azeem