Islamabad: Federal Finance Minister Muhammad Aurangzeb said that the last installment of 1 billion 100 million dollars is likely to be received from the IMF this week under the standby arrangement, foreign exchange reserves will reach the level of 10 billion dollars by June.
While addressing the Colliders in Islamabad Business Summit on Tuesday, mocking the talk of Plan B made by his predecessor Ishaq Darki, Mohammad Aurangzeb said that when the foreign exchange reserves are only for 15 days’ needs, then there is no Plan B. The standby agreement program of 3 billion dollars from the IMF was very important for Pakistan, the IMF is now praising Pakistan for the successful completion of the program. Under this program, Pakistan has received 1.9 billion dollars so far, while the last installment of 1.1 billion dollars will be received by Monday.
He said that there is a possibility that more inflows will come to Pakistan by June. Currently, Pakistan has foreign exchange reserves of around 8 billion dollars. The State Bank has been buying dollars from the local market to keep the foreign exchange reserves stable. Due to this purchase, the dollar exchange rate is still above Rs 279 against the rupee.
The Finance Minister said that the increase in domestic foreign exchange reserves was not due to borrowing, but due to market operations and other measures.
He said that we have requested a long-term program from the IMF because we want to stabilize the country’s economy by implementing macroeconomic measures and reform agenda. At the lowest, tax to GDP will have to be brought up to 13-14%, serious efforts will have to be made to reduce losses in the energy sector. Textile and information technology sectors have to be given attention to increase exports.
Finance Ministry, Federal Board of Revenue and Ministry of Law are trying to increase taxes. In the current fiscal year, FBR’s tax collection has increased by 30.2 percent over the fixed target of Rs 6707 billion. We have to go in consultation with the provinces for a substantial increase in the tax net. Tax cases are in the tribunals, which have not been decided. We have requested the tribunals to decide the cases in the next 3-4 months.
He said that the Saudi crown prince has assured investment of five billion dollars in his recent visit, now the ball is in our court how we identify viable projects. He expected that next year in the country. Foreign direct investment will increase.
The Federal Minister of Finance said that the government wants to give relief to the weaker sections by controlling the inflation. Inflation is likely to be 24 percent this fiscal year, which is less than 29.2 percent compared to the previous fiscal year. The policy rate has been maintained at 22 percent considering the downward trend in inflation.
Mohammad Aurangzeb said that the economic situation is improving due to government initiatives and better coordination with partners. A reduction in the current account and trade deficit has been recorded. Agriculture sector is growing at the rate of 5% of GDP.
