FM Aurangzeb Emphasizes Structural Reforms to Attract Foreign Investors
- FM Aurangzeb: Structural Reforms Essential for Foreign Investment
Keywords: structural reforms, foreign investment, FM Aurangzeb
Tags: structural reforms, foreign investment - Pakistan’s Commitment to IMF Benchmarks for Economic Stability
Keywords: IMF benchmarks, economic stability, Pakistan
Tags: IMF, economic stability - Positive Economic Trends: Inflation Drops to 6.9% in September
Keywords: inflation, economic trends, September
Tags: inflation, economic recovery - Barclays Investors Praise Pakistan’s Economic Progress
Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has asserted that the government is committed to ensuring that Pakistan continues its journey toward structural reforms in critical economic sectors, including energy, state-owned enterprises (SOEs), privatization, taxation, and rightsizing of government.
He stated that Pakistan has previously been perceived as a “single-tranche country,” but the time has come to dispel this perception and fulfill the structural benchmarks agreed upon under the program with the International Monetary Fund (IMF) to ensure lasting macroeconomic stability.
This statement was made during a meeting with a group of investors led by Barclays, who visited the Minister at the Finance Division. The Minister provided the delegation with a briefing on various policy interventions and initiatives undertaken over the past 12 months to reform the economy and presented an overview of growth and macroeconomic stability concerning key economic indicators, such as twin deficits, stable currency, foreign exchange reserves, and inflation, which has remained “a significant story throughout the year.”
The Minister noted that the current macroeconomic stability is a result of the successful conclusion of a nine-month IMF Stand-by Agreement, initiated by Prime Minister Shehbaz Sharif and implemented with discipline and rigor by the caretaker administration. This paved the way for a larger and longer Extended Fund Facility (EFF) to ensure sustained macroeconomic stability and implement structural reforms.
He highlighted a positive outcome of this stability, pointing out Pakistan’s ability to clear Letters of Credit and import backlogs by May and June last year, as well as the payment of nearly $2 billion in profits and dividends to foreign investors.
The Minister remarked that the new fiscal year began on a clean slate and noted the continuation of macroeconomic stability in the first quarter, with the current account deficit remaining under control due to strong remittances, healthy Roshan Digital Account (RDA) flows, and positive trends in exports, particularly in the diversification and growth of IT exports and services as indicated by August figures.
He also referred to credit upgrades by international credit rating agencies and shared plans to access international capital markets. The government has sent powerful signals to the local market by canceling some bank auctions, indicating that it is not desperate to borrow and will only do so at favorable rates.
He expressed the government’s intention for banks to begin lending to the private sector on non-discriminatory terms and highlighted incentives offered in this year’s budget to increase micro-lending to the private sector, particularly in agriculture, the IT ecosystem, and the SME sector.
Additionally, he briefed the delegation on various measures taken by the government to demonstrate its commitment to implementing the reform agenda, including the signing of a National Fiscal Pact between the federal government and its four provinces to implement reforms across various sectors. He emphasized that the government’s vision is clear: to allow the private sector to lead growth with a supportive policy framework and continuity.
In response to a question, the Minister noted a significant drop in inflation figures, from a high of 38% last year to a 44-month low of 6.9% in September this year, as a strong indicator of economic recovery.
Members of the Barclays investors delegation praised the Minister for his comprehensive overview of the Pakistani economy and expressed their appreciation for the positive changes they have observed in the country. They also acknowledged the visible structural reforms and stability across different economic sectors and expressed a keen interest in exploring opportunities for investment and business collaborations to contribute to Pakistan’s economic growth.
