Pakistan likely to secure external financing, says FM Aurangzeb

Senator Muhammad Aurangzeb, Pakistani Federal Minister for Finance and Revenue has announced that the government is nearing the point of securing external financing guarantees as it prepares to finalise a $7 billion loan agreement with the International Monetary Fund (IMF).

He said he was hopeful that the IMF would approve the programme, while reiterating Prime Minister Shahbaz Sharif’s earlier statement that this would be the country’s last programme with the international lender.

The government reached a staff-level agreement of $7 billion on a 37-month Extended Fund Facility (EFF) in July, which is still subject to approval by the IMF’s board.

He further informed that the government had cleared all outstanding payments, including import LCs, contracts, and dividend remittances, due to improved economic indicators, while highlighting the reduction in inflation rate from 23.7% to 9.6% in August 2024, contributing to a decrease in policy rates and benefiting the industrial sector. The improvement in credit ratings from Fitch and Moody’s, he said, is seen as an “external recognition” of the country’s economic progress.

Sharing his views on the Federal Board of Revenue’s (FBR) tax targets, he said the government was focused on increasing tax collection and lamented the fact that 43% of the sectors in the country paid less than 1% and urged wholesalers, retailers and distributors to contribute to the country’s economy.

Though he admitted that the salaried class as well as the manufacturing industry were paying way above what they were contributing to the GDP, he added that everyone will have to contribute to pave

His statement comes following FBR official statement on Sunday admitting that the tax machinery suffered a shortfall of Rs 98 billion in the first two months of 2023-24. The net collection for the said period stood at Rs 1,456 billion against the set target of RS 1,554 billion.