Caretaker Finance Minister Dr Shamshad Akhtar on Thursday said a new program with the International Monetary Fund (IMF) will be discussed if she gets more time.
The minister said this while talking to media persons at the Finance Division today. While acknowledging the improvement in Pakistan’s economy, she stressed the need for sustained efforts to further enhance economic conditions and highlighted the importance of Pakistan remaining in the IMF program. She said staying in the program is crucial until exports increase and local resource generation is maintained.
The minister said the government may impose additional taxes on various sectors, including real estate and retailers. In the event of any shortfall in tax revenue, additional measures would be considered to meet financial obligations. She further added that for now, the government has deferred the decision to issue a $1.5 billion sovereign bond to bridge the financial gap.
The finance minister was hopeful that the country’s credit rating would improve following the IMF staff-level agreement. Addressing financial inflows, she said Pakistan may receive $2 billion from the World Bank this year and another $1 billion from the Asian Development Bank (ADB), Islamic Development Bank, and the Asian Infrastructure Bank.
The minister underscored the priority of completing the current IMF program and suggested that discussions for a new program with the IMF could take place if she is given more time.
She added that work on the last tranche of $1.1 billion under the IMF SBA will start soon. The IMF has not set any preconditions for the second tranche of $700 million, providing a sense of flexibility in navigating the economic challenges ahead.
Policy Targets For Economic Stability
The caretaker minister acknowledged Wednesday’s staff-level agreement as a crucial step towards stability. She said key reforms under the Standby Arrangement have positively impacted the overall business environment and instilled confidence among investors. International partners have also extended their support, acknowledging the country’s commitment to economic restructuring.
She added that the government acknowledges facing external risks such as geopolitical tensions, escalating commodity prices, and challenging global conditions, and efforts will continue for macroeconomic sustainability and achieve balanced growth. She outlined the following eight policy targets to help sustain the economy:
- Fiscal Consolidation and Development: The government aims to reduce public debt through fiscal consolidation, control expenditures, improve revenue performance, and enhance the quality of public investment.
- Social Safety Net: Prioritizing the protection of vulnerable sections, efforts will be made to strengthen the social safety net with higher percentage allocations. Programs like the Unconditional Cash Transfers (UCT) Kafaalat Program will be expanded to reach more families.
- Energy Sector Reforms: Under the IMF Standby Arrangement, the government is committed to reducing costs in the energy sector, addressing the viability of the sector, and taking urgent action to reduce the revolving debt of the power and gas sectors.
- Market-Determined Exchange Rate: The government expresses a preference for continuing the market-determined exchange rate policy and rebuilding foreign exchange reserves.
- Proactive Monetary Policy: Prioritizing a proactive monetary policy to bring inflation back to target levels.
- Financial Sector Resilience: Efforts will be directed towards bringing resilience to the financial sector and maintaining stability in the banking system.
- State-Owned Enterprise (SOE) and Governance Reforms: Emphasizing the continuation of reforms in state-owned enterprises and governance to improve the business environment, attract investment, and create job opportunities. The introduction of the SOE Policy, including the privatization of selected SOEs, is underway.
- International Cooperation: The government aims to deepen cooperation with international partners, engaging with multilateral and official bilateral partners for the timely provision of external support crucial for policy and reform efforts.
Dr Akhtar expressed optimism that these policy measures will contribute to economic stability and sustained growth, addressing challenges while fostering a more resilient and prosperous future for the country.
I work at an international rating agency. According to country estimates, Pakistan will approach imf minimum twelve times in the coming decade.
*beg, not approach.
The finance minister didn’t know that Pakistan will not seek another IMF bailout but will keep forever seeking IMF bailout, you HARMKHORS never wants that pakistani people see good time ever in their life.
When any new finance minister comes to know his or her own benefits when asking from IMF, they feel like in heaven.